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2023 (8) TMI 1395 - AT - Service TaxLevy of service tax - Business Support Services or not - income received from BCCI-IPL as the share of central income is nothing but consideration for providing services to BCCI-IPL involving furtherance of business / commerce - sale of space or time for advertisement or not - sponsorship agreements entered into by the appellant with companies - reversal of CENVAT Credit as the appellant was engaged in providing taxable as well as exempted services on the ground that the income received by sale of tickets is exempted service - service tax on Business Support Services on reverse charge mechanism with respect to payments made to foreign players. Demand of Service Tax on the share of income received by the appellant from BCCI-IPL on Central rights - HELD THAT - The very same issue was considered by the Tribunal in the case of KPH Dream Cricket Pvt. Ltd. 2019 (5) TMI 1171 - CESTAT CHANDIGARH as well as in the case of M/S JAIPUR IPL CRICKET PVT. LTD. VERSUS PR. COMMISSIONER OF SERVICE TAX-IV MUMBAI AND (VICE-VERSA) 2023 (6) TMI 1339 - CESTAT MUMBAI where it was held that We also take note of the fact that BCCI is not commercial organization and only organizing game of cricket. Therefore any service rendered to BCCIIPL 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 - From the above decision it can be seen that the income received by the appellant from Central rights is nothing but revenue sharing and not consideration for services provided to BCCI-IPL - the demand under this head cannot sustain and requires to be set aside. Demand of Service Tax under the category of sale space or time for advertisement - HELD THAT - The appellant has entered into sponsorship agreements with various corporates. There is no liability to pay Service Tax on sponsorship of sports events till the year 2010. The period of dispute in the present appeals is prior to 01.07.2010. The very same issue was considered by the Tribunal in the case of Hero Motocorp Ltd. Vs. CST 2013 (6) TMI 447 - CESTAT NEW DELHI and in the case of Hero Honda Motors Ltd. DLF Ltd. vs. CST Delhi 2013 (4) TMI 428 - CESTAT NEW DELHI where the demand was set aside. Reversal of CENVAT Credit - demand alleging that the appellant has provided exempted services in the nature of sale of tickets - HELD THAT - The Tribunal in the case of KPH Dream Cricket Pvt. Ltd. 2019 (5) TMI 1171 - CESTAT CHANDIGARH and M/S JAIPUR IPL CRICKET PVT. LTD. VERSUS PR. COMMISSIONER OF SERVICE TAX-IV MUMBAI AND (VICE-VERSA) 2023 (6) TMI 1339 - CESTAT MUMBAI had occasion to consider the very same issue and held that sale of tickets cannot be considered as an exempted service. The demand raised on this ground was set aside. Following the same the demand cannot sustain and requires to be set aside. Liability to pay Service Tax under reverse charge mechanism on the payments made to foreign players - HELD THAT - The very same issue was considered by the Tribunal in the case of KPH Dream Cricket Pvt. Ltd. 2019 (5) TMI 1171 - CESTAT CHANDIGARH where it was held that on player s fee no service tax is payable - . The facts and issue being identical the decision is applicable in the present case also. Following the same the demand cannot sustain and requires to be set aside. There are no hesitation to conclude that the demand interest and penalties cannot sustain. The impugned orders are set aside - appeal allowed.
Issues Involved:
1. Taxability of income received from BCCI-IPL under 'Business Support Services' (BSS). 2. Taxability of sponsorship agreements under 'sale of space or time for advertisement'. 3. Reversal of CENVAT Credit under Rule 6(3) for providing taxable and exempted services. 4. Taxability of payments made to foreign players under reverse charge mechanism. Summary: 1. Taxability of Income from BCCI-IPL under BSS: The Tribunal examined whether the income received by the appellant from BCCI-IPL for Central rights could be classified as 'Business Support Services'. The Tribunal referenced the case of KPH Dream Cricket Pvt. Ltd. and concluded that the income was a revenue-sharing arrangement rather than consideration for services provided. The Tribunal emphasized that BCCI-IPL is not a business or commercial organization but is registered for the promotion of sports. Consequently, the demand for service tax under this head was set aside. 2. Taxability of Sponsorship Agreements: The appellant argued that the sponsorship agreements should not be classified under 'sale of space or time for advertisement' but rather as sponsorship services, which were exempt from service tax for sports events before 01.07.2010. The Tribunal agreed, citing previous decisions in Hero Motocorp Ltd. and Hero Honda Motors Ltd., which established that sponsorship of sports events was not taxable. Therefore, the demand under this category was also set aside. 3. Reversal of CENVAT Credit: The Department alleged that the appellant was providing exempted services by selling tickets and thus required to reverse CENVAT Credit under Rule 6(3). The Tribunal, following the decision in KPH Dream Cricket Pvt. Ltd., held that the sale of tickets is not a service and therefore, no reversal of CENVAT Credit is required. The demand on this ground was set aside. 4. Taxability of Payments to Foreign Players: The Department claimed that payments made to foreign players constituted 'Business Support Services' under reverse charge mechanism. The Tribunal, referencing the case of KPH Dream Cricket Pvt. Ltd., held that the players were primarily engaged in playing cricket, and any promotional activities were ancillary. The players were considered employees rather than independent entities providing business support services. Hence, the demand under this category was set aside. Conclusion: The Tribunal set aside the demands, interest, and penalties under all four issues, allowing the appeals with consequential relief.
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