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2019 (5) TMI 1171 - CESTAT CHANDIGARHClassification of services - Franchise service or Business Support services - demand of service tax on Central Rights Income - Revenue Sharing basis - case of the Revenue is that the appellant-assessee is having franchise relationship and by way of maintaining a team is supporting business of BCCI in IPL tournament - HELD THAT:- In the case of Sir Ganga Ram Hospital [ 2017 (12) TMI 509 - CESTAT NEW DELHI ], wherein it was held that if there is Revenue sharing by the doctors wherein some part of fees retained by the hospital and some is given to the doctor, the same cannot be taxed under Business support services - thus the appellant-assessee is not providing any Business Support Service. Also, BCCI is not commercial organization and only organizing game of cricket. Therefore any service rendered to BCCI-IPL is not in the nature of support of business of BCCI. Therefore, on that ground also; no service tax is payable by the appellant-assessee. Thus, on central rights income, no service tax is payable by the appellant-assessee - demand set aside. Classification of services - fee paid to overseas players - classified under the head Business Support Service or not? - HELD THAT:- The main activity of the appellant-assessee is to play cricket apart from that, the appellant-assessee are engaged in the promotional activities which are ancillary to the main activity of playing cricket - In the case of Sourav Ganguly [ 2016 (7) TMI 237 - CALCUTTA HIGH COURT ] it was held that the remuneration received by the petitioner from the IPL franchisee could not be taxed under business support service - thus on player’s fee, no service tax is payable by the appellant-assessee - demand set aside. Classification of service - player transfer fees - classified under the category of manpower recruitment or supply agency services? - HELD THAT:- The prime activity of the appellant is that they are engaged in the activity of organizing the cricket tournament and ‘manpower recruitment or supply agency service’ is not the principal business of the appellant-assessee. Therefore, the service tax cannot be demanded under the category of ‘manpower recruitment or supply agency service’ for transfer of player to another team as held by the of Hon’ble Gujarat High Court in the case Arvind Mills Limited [ 2014 (4) TMI 132 - GUJARAT HIGH COURT ] - As the main activity of the appellant-assessee to play cricket, therefore, no service tax is payable by the appellant-assessee under the category of ‘Manpower Recruitment or Supply Agency service’ for transfer of player fee - demand set aside. Classification of services - appellant-assessee entered into an agreement with Emirates, Dubai for granting the sponsorship rights of the cricket team of the appellant to Emirates - sponsorship service or not? - demand was confirmed on this account on the ground that the Emirates had invested money for the promotion of his own brand and not the sports event, that profit is being generated through this activity and that Emirates did not sponsor the sporting event and therefore, the exclusion under the sponsorship service is not available to them - HELD THAT:- We have gone through the definition of sponsorship service. As per definition, it does not include services in relation to sponsorship of sports events and IPL is a sport event as held by this Tribunal in the case of DLF Ltd. [ 2012 (5) TMI 404 - CESTAT, NEW DELHI ] - as per CBEC circular No.334/1/2010 dt.26.2.2010, the exclusion clause is available for sponsorship services pertaining to sports events was withdrawn and the period involved in this case is prior to that, in that circumstance, the demand under the category of sponsorship service is not sustainable - demand set aside. Classification of services - player release fee paid to overseas cricket board - classified under manpower recruitment or supply agency service or not? - Reverse charge mechanism - HELD THAT:- Neither cricket board nor the appellant-assessee are engaged in providing Manpower Recruitment or Supply Agency Service’ of employees. Therefore, no service tax is payable by the appellant-assessee - demand set aside. Classification of service - amount paid to overseas agency - classified under Business Auxiliary Service or not? - HELD THAT:- The appellant-assessee entered into agreement with the overseas agencies for holding negotiations with overseas players as regards arrangement with IPL, which were undertaken outside India and for that activity, the amount has been paid to the overseas agencies. Such amount has been paid by the appellant-assessee for arranging player, who has to play cricket in IPL tournament and as per section 65 (19) of Finance Act, 1994 definition of business auxiliary service, the service tax is required to be paid for promotion or marketing or sale of goods produced or provided by or belonging to the client or promotion or marketing of service provided by the client - Admittedly, organizing sport event is neither any service nor any goods, therefore, the said amount paid on account of negotiations cannot be qualified as Business Auxiliary Service under section 65 (19) of Finance Act, 1994 - demand set aside. Classification of services - amount paid to African Earth Events - classified under the category of Business Support Service or not? - HELD THAT:- In this case, the main object of the appellant-assessee is to promote game of cricket in India through IPL tournaments. For obtaining service of organizing the said tournaments cannot be treated a service is in nature of Business Support Service. Therefore, no service tax is leviable under the category of Business Support Service - demand set aside. CENVAT Credit - taxable as well as exempted services - gate receipts collected by the appellant-assessee terming it that they have provided any exempted service - Rule 6 (3) (i) of Cenvat Credit Rules, 2004 - HELD THAT:- The amount has been received by the appellant as the sale of ticket for cricket tournament which is not service, therefore, when it is not the service, it cannot be termed as service, no service tax is required to be reversed. Further, for the period 2010-12, the appellant-assessee has also reversed the said amount, therefore, no demand is sustainable on that account - the demands of service tax are not sustainable against the appellant- assessee. Appeal allowed - decided in favor of appellant.
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