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TMI Blog2024 (9) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... ity, there are no merit found in the impugned order and the same is set aside - appeal allowed. - HON BLE MR.ASHOK JINDAL , MEMBER ( JUDCIAL ) For the Appellant : Shri Abhishek Deodhar , Advocate Present For the Respondent : Shri APS Parihar ( AR ) ORDER PER : ASHOK JINDAL The appellant is in appeal against the impugned order wherein the appellant has asked to pay service tax under Rule 6(3) of Cenvat Credit Rules, 2004 as they are not maintaining cenvat credit account for inputs and input services used for providing exempted output services. 2. The facts of the case are that the appellant is engaged in the business of operating the port at Dhramtar, Maharasthra whereby services of berth hiring, cargo handling, etc. are rendered. The appellant has also invested the surplus cash in mutual funds. The Revenue is of the view that the investment of surplus cash in mutual funds amounts to trading of securities, which is an exempt service as defined under Rule 2 (e) of Cenvat Credit Rules, 2004. On this basis, the Revenue has proceeded to order payment of an amount under Rule 6 (3A) of CCR. The amount has been computed by applying the ratio of value of so- called exempted service to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seems to have confused by the interpolation of the meaning of the word goods . It has to be seen that whenever the Legislature in the Finance Act,1994 wanted to mention services in regard to securities it has used the word securities itself. For eg: Section 65 (95a) defines share transfer agent as under : Share transfer agent means any person who maintains the records of holders of securities and deals with all matters connected with the transfer or redemption of securities or activities incidental thereto The department has no case that appellant has provided taxable service of share transfer agent to any other. The taxable service is defined under Section 105 (zzzzg) which says to any person, by a recognized stock exchange in relation to assisting, regulating or controlling the business of buying, selling or dealing in securities and includes services provided in relation to trading, processing, clearing and settlement of transactions in securities . 24. In the present case, the appellant has invested their income in shares / mutual funds and also sold certain investments. They have acted like any individual who would invest funds in shares / securities. The appellant is not eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegra since considered in a series of judgments of this Tribunal. In Ace Creative Learning (P.) Ltd. case (supra), this Tribunal analyzing the provisions applicable to investment in mutual funds held as follows: 5. After considering the submissions of both the parties and perusal of the material on record, I find that the appellant is providing Commercial Training and Coaching Services and they have also invested in the mutual funds and have earned profit during the year 2014-15, 2015-16 2016-17 which they have shown as under the head other income . The Department has wrongly considered the investment in mutual fund as trading in mutual funds and has issued a notice on the presumption that the appellant is providing exempted services which is trading in mutual funds and has not maintained separate records for common input services availed in providing the output services and exempted activity i.e. trading and hence are liable to pay 6%/7% of the amount of exempted services. Further I find that the trading has not been defined under the Service Tax but in the context of securities, trading means an activity where a person is engaged in selling the goods and occupy for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and securities, and whether appropriate credit was required to be reversed by treating such investment as exempted Service, the first authority has held that it was proper for him to remand the issue back to the file of the Original authority to verify from the records if the appellant was involved in trading activity of shares and securities other than their own concern or was it done for third parties or subsidy concerns. It is against this order that the present appeal has been filed before this forum. The first appellate authority having observed that the bagasse is not an exempted, but is just an agricultural waste, has however, upheld the liability on the part of the appellant to maintain separate accounts in terms of rule 6(3) of CCR, failure to do so which would attract duty liability equal to 6% of the value of the exempted products/services. 4. In the second appeal, Order-in-Original No. 21/2017-CE dated 29.03.2017 passed by the Commissioner of Central Excise Service Tax, Salem has been challenged, wherein, the Ld. Authority has confirmed the demand being 6% of the value of exempted service. . .. 12. Insofar as first issue is concerned, we find that the appellant had i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant does not do any activity for another for a consideration. Further, specific exclusion from the definition of service is given to transactions involving transfer of title in goods or immovable property by the way of sale , since trading in security involves transfer of title in goods, the activity of trading in securities cannot therefore be said to be a service. 16. In the light of our discussion above, we hold that: (a) investment in shares/security does not per se tantamount to trading in securities , (b) inputs/ input services cannot be said to be used in or in relation to trading in securities , and (c) trading in securities is not a service, let alone an exempted service . 17. We thus hold that the authorities below have grossly erred in demanding the tax on the investment made, by treating the same as service although exempted and consequently, we set aside the impugned order. 27. After appreciating the facts, and following the decisions as above, we are of the considered opinion that the demand cannot sustain. The impugned order is set aside. The appeal is allowed with consequential relief, if any. 5. As this Tribunal in the case of Cognizant Technology Soluti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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