TMI Blog2023 (12) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... he remuneration paid to the appellant is fixed. If he is not able to play by reasons stated in the agreement, the appellant is to be compensated and thus is taken care of by M/s.ICL. Even though the appellant takes part in the promotional activities, the remuneration received remains fixed and is not based on the profit earned by M/s.ICL from such advertisements - The appellant is hired to play cricket and has not been hired to do only the promotional activities. The appellant being a professional cricketer, M/s.ICL has hired the appellant to play cricket which is the dominant activity of the contract. Merely because the appellant engages in some promotional activities of the employer, as part of playing cricket by way of wearing the shirt showcasing the logo and name of M/s. ICL etc., it cannot be said that the entire payment is for brand promotional activities. The Tribunal in the appellant s own case CCE ST, CHENNAI VERSUS L. BALAJI, S. BADRINATH, DINESH KARTHICK, MURALI VIJAY, VIDYUT SIVARAMAKRISHNAN, ANIRUDA SRIKKANTH, SURESH KUMAR, YO MAHESH, HEMANG BADANI, ASHWIN R,C. GANAPATHY, ARUN KARTHIK KB, KAUSHIK GANDHI, PALANI AMARNATH C, ABHINAV MUKUND (VICE-VERSA) [ 2019 (5) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tracted players, which included players of Indian origin and players of foreign origin. A base price was fixed for each of them and under the process of auction, each franchisee was allowed to bid for any player from the list. In addition to the contracted players, each franchisee was also allowed to accommodate their local players and promising young cricketers. 4. M/s.ICL after successfully bidding the appellant, Shri R. Ashwin, entered into an agreement named as Indian Premier League Playing Contract dated 13.4.2008. As per the agreement, the appellant is required to play on behalf of M/s.ICL in the team of Chennai Super Kings . The appellant was to receive the player fee and other benefits set out in Schedule I of the Agreement. In addition to the player fees, the appellant also received 10% of the player fee for various promotional activities of M/s.ICL and its partners, sponsors etc. From the agreement it appeared that the payment made to appellant though split up between player fee and payment for promotional activities, the whole payment appeared to be of composite nature. 5. Scrutiny of annual report of M/s.ICL indicated that their participation in IPL as a franch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssional cricketer who has an obligation to play and that M/s.ICL shall pay to the player, the Player Fee and other benefits set out in the agreement. Clause 3 of the agreement stipulates the obligations of Player in which it is stated that appellant has to report before M/s.ICl (franchisee) not less than 7 days before the first match in the League. So also, it is stated that the appellant has to play solely for the franchisee in respect of IPL and cannot play for any other team, unless M/s.ICL in its absolute discretion decides to release the player to play for another team. 7.1 The Learned Consultant submitted that all these terms and stipulations in the agreement would indicate that the agreement is a contract of employment wherein M/s.ICL has engaged the appellant to play for their team Chennai Super Kings . The appellant is employed by M/s.ICL for the period of the tournament and the amount received by appellant is not a consideration but remuneration received for participation in the tournament as a player. The remuneration is fixed and does not vary depending upon the profit earned by M/s.ICL or depending upon the number of advertisement or promotional activities. Along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e agreements entered between players and the franchisee. The Tribunal observed that the agreements are in the nature of employment agreement and the amounts received are in the nature of remuneration for the work done by the employee and therefore cannot be subject to levy of service tax. The demand was set aside. 7.4 The Chennai Bench of the Tribunal in the case of India Cements Ltd. Vs CCE Chennai vide Final Order No.40655-40656/2023 dt. 04.08.2023 had occasion to analyse the issue of demand of service tax on the franchisee viz. M/s.ICL on the payments made to the foreign player under reverse charge mechanism alleging that there is import of services. In para-15 of the said final order, the Tribunal held that the players are engaged as professional cricketers by franchisee and therefore the amount paid to the foreign players is remuneration and not consideration for services so as to be liable for service tax under reverse charge mechanism. 7.5 The Tribunal had followed the decision in the case of Yusufkhan Pathan and Irfankhan Pathan (supra) as well as the decision in the case of KPH Dream Team Pvt. Ltd. Vs - 2020 (34) GSTL 456 (Tri.-Chan.). Ld. Consultant submitted that f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a business entity by appearing in advertisement and promotional event or carrying out any promotional activity for such goods, service or event. Explanation. For the purpose of this sub-clause, brand includes symbol, monogram, label, signature or invented words which indicate connection with the said goods, service, event or business entity. 8.2 Though the regime of service tax law has shifted from levy of service tax on the basis of classification of services to the negative list with effect from 01.07.2012, the activity of Brand Promotion is a service as it falls within the definition of service under Section 65B (44) and does not fall under negative list. The same activity which falls under Brand Promotion Service for the period upto 30.06.2012 would fall under the definition of Service as under Section 65B (44) w.e.f. 1.7.2012. It is very much clear that when a service is provided by any person to another under a contract for promotion of marketing of brand of goods, service, event or endorsement of name, by appearing in advertisement and promotion event etc. the activity amounts to rendering service in the nature of Brand Promotion . 8.3 The essence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age). Any such assessment shall be performed by a qualified doctor appointed by the Franchisee and the Player agrees to the release to such doctor of any past medical, psychiatric and/or dental records in his possession or which he is entitled to access which are relevant to and only to be used for such assessment. The Franchisee shall as soon practicable notify IPL (copying the Player) if there is a disagreement between the Parties as to the Player s fitness or mental capability and any such matter shall be referred to a doctor to be appointed by IPL who shall be provided with the above-mentioned past records if appropriate and whose decision in respect of the disagreement shall be final; .. .. 2. Appointment/Remuneration 2.1 The Franchisee hereby engages the Player as a professional cricketer and shall provide to the Player the Player Fee and the other benefits set out below in each case subject to and accordance with this Agreement. 3. Player s Obligations 3.1 The Player covenants with the Franchisee (and with IPL in respect of paragraphs (d), (i) (k), and (l) below that he shall during each Season: (a) unless agreed in advance by the Franchisee, repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or enter into any contractual arrangements or understandings as a result of which he agrees to provide exclusive interviews with or appearances in or on any element of any media organisation. 3A Medical Treatment 3A.1 The Player shall during each Season submit promptly to such medical and dental examinations as the Franchisee may reasonably require and will undergo such treatment as may be prescribed by the medical or dental advisers of the Franchises or the Franchisee s insurers unless such advice is contrary to any previous written medical advice which the Player has received and which is still applicable in which event the Player shall be entitled to seek a second opinion in respect of any such proposed treatment from a qualified doctor approved by IPL .. .. 4. Sponsorship and Promotional Activities 4.1 The player grants to the Franchisee and IPL for the benefit of both the Franchisee and IPL (with the right for the Franchisee and IPL to sub-license such rights) the right during the Team to : (a) photograph the Player both individually and as a member of the Squad when he is involved in activities relating to the Team (b) film, televise, photograph, ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other employment; or be engaged or involved in any trade, business or occupation or participate professionally in any other sporting or athletic activity anywhere in the world without the prior written consent of the Franchisee. 11. From the extracts of agreement noticed above, it can be seen that the appellant is under the control and supervision of the M/s.ICL during the period of agreement. The appellant is restricted from playing cricket match for any other team. So also, it is obligatory for the appellant to inform any medical condition which affects his ability to play. The appellant has to undergo medical examination as required by M/s.ICL. Again, the appellant is under obligation to attend training, coaching etc. These terms of the contract strongly indicate that the contract is in the nature of an employment contract. Though the appellant may be an independent professional player his services are taken up by M/s.ICL for playing IPL under the team Chennai Super Kings . So also, the remuneration paid to the appellant is fixed. If he is not able to play by reasons stated in the agreement, the appellant is to be compensated and thus is taken care of by M/s.ICL. Even th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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