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3. Briefly stated the facts of the case are, Appellant/Assessee is a venture capital trust2. Institutional investors contribute money to the trust fund and the same is managed by an Investment Manager.

4. An investigation was conducted by Anti-Evasion Unit of the Jurisdictional Commissionerate against assessee. The investigating team took a view that assessee had retained certain portion of income distributable to the contributors which appeared to be service charge/fee for having managed the asset of the trust/fund on which service tax was required to be paid under the category of Established under Indian Trust Act, 1882 and Connected matters 'banking and other financial services' as defined under Section 65 (105)(zm) of the Finance Act, 19943.

(Emphasis Supplied)

13. In this case, there is no dispute with regard to rate of duty in this case. The question is whether assessee is liable to pay the duty. Therefore, in our considered view, appeal is maintainable before this Court.

2022-VIL-76-SC-CE, para 6 and Connected matters Re:Question No.(i)

14. It was argued by Shri. Shivadass that the Act does not recognize 'trust' as a person and assessee cannot be considered as a juridical person for the purpose of charging service tax. On the other hand, Shri.Neeralgi's contention is that the trust is registered under the SEBI Act and it is treated as a 'juridical person' under the said Act; and therefore, the trust is a juridical person and is liable to pay service tax.

15. The definition clauses of each statute must be read with the object and purpose of that statute only as intended by the legislature. Various statutes such as SEBI, GST, IBC recognize 'trust' as a person whereas the Finance Act does not. The issue involved in this case is liability to pay Service tax, therefore, the relevant statute is the Finance Act. Hence, the contention urged by Shri. Neeralgi is untenable.

16. The CESTAT has recorded in para 37.4 of the impugned order that, since the trust is treated as juridical and Connected matters person under SEBI, there is no reason why it should not be treated as a juridical person for taxation. This view of the CESTAT is untenable because, for the purpose of levy of tax, the entity has to be recognized under the said Act.

• the additional return on investment to Class 'A' and 'B' contributors would be 80% of Rs. 15 Crores= Rs. 12 Crores;

• the remaining balance of 20% of Rs. 15 Crores= Rs. 3 Crores shall go to Class 'C' contributor.

20. Thus the total amount remaining with the Trust will be nil.

21. In substance, Shri. Shivadass contended that the fund does not make any profit nor does it provide any service, therefore, imposition of Service tax is untenable. We find merit in this argument because, the assessee acts as a 'pass through', wherein funds from contributors are consolidated and invested by the investment manager. It acts as a trustee holding the money belonging to contributors to be invested as per the advice of the investment manager.