TMI Blog2023 (6) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... ged services to BCCIIPL in organizing the IPL tournament, and whether it is taxable as Business Support Services ? - HELD THAT:- The Tribunal by relying upon the decision of the Tribunal in the case of Mormugao Port Trust Vs. CCE [ 2016 (11) TMI 520 - CESTAT MUMBAI ] has set aside the demand holding that in case of joint venture contract, there is neither an intention to render a service to the other partner(s) nor is there any fixed consideration quid pro quo for any particular service of a partner. It has further been held that a contractorcontractee or the principal-client relationship, which is the essential element of any taxable service, is absent in the case of the partners or co-venturers in a joint venture agreement. In the present case, since the demand of Rs.19,15,11,610/- in respect of Central Rights Income arising out of the franchise agreement cannot be considered as provision of any service between the members to the franchise agreement, we are of the view that such demand cannot be confirmed on the appellants-assessee. Whether 10% of the payments made by Franchisee Company to the foreign players is taxable under the reverse charge mechanism ( RCM ) as BSS on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PL 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 as discussed hereinabove in the preceding paragraphs, hence the demand of service tax is not sustainable. Further, the documents produced by the appellants-assessee indicate that the expenses incurred were on account of purchase of match tickets in UK, creation of DVD titled Rajasthan Royals road to victory etc, which were reimbursed to the foreign vendor - As the present case is identical in the factual matrix to the above case already decided by the Tribunal, it is considered that there exists no ground to deviate from the above stand. Accordingly, the confirmation of demand Rs.22,48,336/- towards service tax liability on reimbursable amount paid to foreign vendors on RCM basis is not sustainable. Whether the appellant is required to reverse common CENVAT Credit availed for providing taxable and exempt output service? - HELD THAT:- The explanation 3 to Rule 6(1) of the Cenvat Credit Rules, 2004 was amended vide notification No. 13/2016-C.E. (NT) da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd support staff, Principal Commissioner concluded that the service tax is not chargeable on such activity. Further, in this case the fees pertains to coaching the cricket players who are playing for the team and the amount paid is attributable to the coaching service or support service and thus service tax cannot be demanded on these fees and services, as sports coaching services are exempt - the demand of service tax on this issue is not sustainable and appeal made by the Revenue does not survive. The impugned order of Principal Commissioner of Service Tax, Mumbai-IV confirming the adjudged demands are liable to be set aside as being not sustainable in law - Appeal allowed. - Hon ble Mr. S.K. Mohanty, Member (Judicial) And Hon ble Mr. M.M. Parthiban, Member (Technical) For the Appellant : Shri Rohan Shah, Senior Advocate a/w S/Shri Raghav Khandelwal, Nishant Shah, Ms. Surbhi Prabhudesai Virangana Wadhawan, Advocates. For the Respondent : Shri Anand Kumar, Authorized Representative. ORDER PER: S.K. MOHANTY Briefly stated, the facts of the case are that M/s Jaipur IPL Cricket Private Ltd. (presently known as M/s. Royal Multisport Private Limited) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this context, he has relied upon the decision of this Tribunal in the case of KPH Dream Cricket Pvt. Ltd. vs. CCE ST, Chandigarh-I (vice versa) reported in 2019 (5) TMI 1171 CESTATChandigarh. As regards applicability of service tax on the fees paid to foreign players, he submitted that the amount paid to the foreign players as fees cannot be subjected to levy of service tax under the taxable category of Business Support Service (BSS). He has relied upon the decision of coordinate bench of this Tribunal in the case of Sourav Ganguly vs. Commissioner of Service Tax, Kolkata 2020 (12) TMI 534 CESTAT Kolkata to support his stand. As regards fees paid to players agent abroad, he submitted that the appellants-assessee had no contractual relationship with such agents and as such the payments made by the players to their respective agents cannot be subjected to levy of service tax in the hands of the appellant inasmuch as there is no relationship of service provider and receiver adjudged in such type of transaction. To support such stands, the learned Advocate has relied upon the decision of this Tribunal in the case of KPH Dream Cricket Pvt. Ltd. (supra). 2.1 With regard to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermed as a service inasmuch as there is no relationship exists with the service provider and service receiver in order to fall under the category taxable services of Business Support Service. Thus, the appellant was not statutorily required to reverse any cenvat credit in respect of prize money. 3. On the other hand, learned Authorised Representative appearing for the Revenue reiterated the findings recorded in the impugned order and contesting the service tax demand dropped therein on the ground that such action of the Adjudicating Authority is not proper and justified. 4. Heard both sides and examined the case records. 5. The following seven issues arise out of the impugned order for consideration by the Tribunal: (i) Whether receipt of the appellant-assessee s share in the Central Rights Income is a consideration for rendering alleged services to BCCIIPL in organizing the IPL tournament, and whether it is taxable as Business Support Services ( BSS )? (ii) Whether 10% of the payments made by Franchisee Company to the foreign players is taxable under the reverse charge mechanism ( RCM ) as BSS on the basis that the players carry out promotional activities (incl. w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the capacity of recipient of service under Reverse Charge Mechanism (RCM), it is not in dispute that the appellants-assessee have entered into an agreement with individual foreign players and other professionals as a franchisee, wherein they have engaged those players as a professional cricketer. The aforesaid agreement also provided for the players, to wear team clothing , to participate in media, sponsorship and the promotional activities of the franchisee. The learned Principal Commissioner in the impugned order had concluded that such activities of the players are in the nature of support service in marketing the franchisee s trademark/ logo and thus contribute to the promotional activities. Accordingly, in terms of specific clause in the agreement indicating 10% of the total fees being payable to the player, when he does not happen to play even a single match, thereby attributing this part of 10% as consideration for promotional activities, the learned Principal Commissioner had confirmed the demand of service tax for Rs.47,91,703/- relying on the instructions of CBIC dated 26.07.2010, while dropping the demand on the balance 90% of fees attributing the same to sports acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, the aforesaid view gets strengthened from the manner in which the Legislature itself acted. Realising that Section 67, dealing with valuation of taxable services, does not include reimbursable expenses for providing such service, the Legislature amended by Finance Act, 2015 with effect from May 14, 2015, whereby Clause (a) which deals with consideration is suitably amended to include reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service. Thus, only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. Though, it was not argued by the learned counsel for the Department that Section 67 is a declaratory provision, nor could it be argued so, as we find that this is a substantive change brought about with the amendment to Section 67 and, therefore, has to be prospective in nature. In the present case before us, the disputed period for which demands were raised relate to 2008-2009 and 2011-2012, much prior to the amendment to Section 67 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersa), 2019 (5) TIOL 1882 CESTAT Mad. and M/s KPH Dream Cricket Pvt. Ltd. (supra). Upon consideration of such issue, the Tribunal had held that no Cenvat credit is required to be reversed in the above situation as follows: In re- L Balaji and Others 7.5 The next point urged on behalf of the assessees is that the working of the taxable value where the Revenue sought to include, for the year 2011-12, the prize money. It is not disputed by the Revenue that the prize money was not given by its franchisee, it s rather the money received from BCCI directly for winning and not towards any services. Hence, we are of the view that the prize money could never be included in the taxable value. But, however, since we are holding that there was no service at all, the above question is just academic. In re-KPH Dream Cricket Pvt. Ltd. (supra). 3. The demand sought to be recovered on account of gate receipts collected by the appellant-assessee terming it that they have provided any exempted service, therefore, in terms of Rule 6 (3) (i) of Cenvat Credit Rules, 2004, they are required to reverse the amount. 34. We find that the amount has been received by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal held in this case that on player s fee, no service tax is payable and upheld the decision of the Commissioner in rightly dropping the demand of service tax on player s fees. We find that the instant case before us is covered by the decision of the Tribunal in the above case, and thus we donot find any merit for interfering with the decision of the learned Principal Commissioner in dropping the demand of service tax in the impugned order. 5.8. On the seventh issue as to whether 100% of payments by the company to foreign coaches and support staff is taxable under RCM as BSS on the basis that they carry out promotional activities, we find that the issue has already been addressed in detail in the impugned order by the learned Principal Commissioner concluding that the activity of coaches and also support staff clearly stands out distinctly different as coaching service provided in relation to sports and is not covered under Business Support Service; further he concluded that there exists a specific category for levying such category of services, i.e., commercial training or coaching centre . However, as the coaching in the field of sports has been specifically excluded from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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