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2020 (6) TMI 352 - AT - Service TaxDemand of Service Tax - reverse charge mechanism - Manpower Recruitment and Supply Services - Intellectual Property Right Service - Management and Business Consultant Services - Programme Producer Services - Sponsorship Services - Time Limitation - Principles of Natural Justice - Jurisdiction. Manpower Recruitment and Supply Services - HELD THAT:- If the agreement between Appellant and FSE are examined in terms of the definitions of Manpower Supply & Recruitment Agency Services as per Section 65 (105)(k) read with Section 65 (68) of Finance Act, 1994 and the clarification issued by the Board and above decision of Tribunal, we conclude that services provided by M/s FSE are squarely covered under this category. Vijay Amritraj is a separate and distinct legal person from FSE, in which he may be one of the Directors. FSE has entered into agreement with Appellants for causing the appearance and participation of Vijay Amritraj in a tournament organized by the appellant against payment of agreed consideration - there are no doubt in holding that FSE was in the business of supplying recruiting and providing the players to the sport events organizers like appellant. Hence the services provided by such companies as FSE will be classified as Manpower Recruitment and Supply Agency Services as defined by the Finance Act at relevant times. In case of fees paid for secondment of employees of IMC DBA New York, USA for Lakme Fashion Week, an event organized by appellants we find that nothing has been placed on record that during the period of secondment, these employees of their USA counterpart worked in manner so as to create employer employee relationship between the appellants and those persons. These people continued in employment with the USA company and nothing like salary or remuneration was paid either in Indian or Foreign Currency, to these people by the Appellant - there is no hesitation in holding that the USA company has provided “Manpower Recruitment and Supply Services” to the Appellant. Intellectual Property Service - HELD THAT:- Appellants in the present case undertook to register the trademark of their USA counterparts in India for organizing the event of Lakme Fashion Week. For registering they incurred certain expenses which were paid to them by the USA company. There was no transfer of the right temporarily, by the USA company, nor any permission was granted for use or enjoyment of any intellectual property. Nothing is forthcoming to show that there was such transfer or permission. Revenue has not been able to substantiate that the basis ingredients to hold that USA Company had provided any Intellectual Property Service - impugned order set aside. Management and Business Consultant Services - HELD THAT:- Appellants is part of a group of companies located in India and elsewhere. Certain common facilities are created for usage of all the group companies. In this case, USA company created software and SAP facilities and incurred expenditure for the same. This expenditure has been distributed amongst all the group companies on a proportionate basis depending upon the usage. It is a settled position that the payments made for creation of common facilities in a group company is not payment towards any service rendered, and hence cannot be subjected to Service Tax. Appellants have contended that the services revenues sought to be taxed under the category of “Programme Producer Services” are not in respect of any services provided but are towards transfer of right to use and hence is an act of sale - HELD THAT:- Issue under consideration was considered by Mumbai Bench of Tribunal in the case of BOARD OF CONTROL FOR CRICKET IN INDIA VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI-I [2014 (9) TMI 598 - CESTAT MUMBAI] holding that the activity of recording the live cricket match for providing feed to TV channels is activity covered under the taxable category of “Programme Producer Services” and will be subjected to Service Tax - Since the issues involved in the present case are identical to the case considered by Mumbai Bench referred above, in our view the order of Commissioner upholding the demand under the category of “Programme Producer Services” cannot be faulted with. Sponsorship Services - HELD THAT:- In the present case undisputedly Appellant have received certain amounts from sponsor’s towards sponsoring the various events and matches organized by them. Appellants do not dispute that the services so provided by them fall in the category of sponsorship services - In respect of the claim made by the appellants that certain payments were received by them towards the sponsorship of sports event, or from the service recipient located outside India, or from service recipients located in India who were located in India, Commissioner should have recorded the finding in terms of the above provisions of the Finance Act, 1994 and the clarification as above issued by the Joint Secretary (TRU). If the claims made are justified these amounts should be deducted from the taxable value - Since the Commissioner has failed to consider these submissions in the light of the above referred clarification issued by the Ministry, the matter needs to go back to the commissioner for consideration of these. Appellants have submitted that demand in respect of the three taxable services received by them against foreign currency expenditure has been made collectively without specifying the quantum of expenditure that can be attributed to each of the services separately - we are setting aside the entire demand made in respect of Foreign Currency Expenditure and remanding back the matter to the Commissioner for determination of value of taxable services in respect of which demands are to be confirmed separately. Appellants should make available to the Commissioner all the information that may be required/ called by him for determination of taxable value in respect of each service separately. Time Limitation - HELD THAT:- The issues which are raised and adjudicated, are all issues which would involve the interpretation of legal provisions. If the appellants claim that a certain issue was of interpretation, then it is for him to establish on the basis of documents and evidence to show that he genuinely had made effort to resolve the doubts that could have arisen in respect of interpretation of law. Appellant cannot have defence, in his own wrong or misinterpretations. In the present case appellants have made the statement without substantiating the grounds on which they could have entertained the interpretation which they followed - In absence of any evidence to that effect we are not in position to agree with this submission of the Appellants. Jurisdiction - HELD THAT:- This is not a show cause notice in terms of Section 73 (1) of the Finance Act, 1994, but is simply a statement of demand made in terms of Section 73 (1A). Section 73 (1A) inserted in Finance Act, 1994 by Finance Act, 2012 - in cases of statement of demands issued in terms of this sub section, the jurisdiction will immediately at the time of issuance itself be vested with the officer adjudicating the earlier show cause notices. There may not be any need to confirm separate jurisdiction in respect of such a statement of demand, because as per the provision in terms of which such statement of demand is issued makes it part of the Show Cause Notice issued earlier. However since the matter is going back to the Commissioner on remand he should resolve any jurisdictional issues which may be there and then proceed to adjudicate this statement of demand. Principles of Natural Justice - HELD THAT:- Natural Justice is back bone of modern judicial system and it is bounden duty of the adjudicator to not only follow the principles of natural justice but show that he is following the said principles. Hence in respect of these the matter could be remanded back on this preliminary ground itself. CENVAT credit - HELD THAT:- We are in agreement with the submissions made by the appellant subject to verification of the reversal made by them of the CENVAT Credit now being demanded from them. Commissioner should in remand proceedings cause a verification of the same and record a proper finding. Interest - HELD THAT:- Since the demand of tax has been upheld the demand for interest will follow. It is now settled law that interest under Section 75, is for delay in the payment of tax from the date when it was due. Since appellants have failed to pay the said Service Tax by the due date interest demanded cannot be faulted. Penalty - HELD THAT:- Since matter is being remitted back to the commissioner for redetermination of the quantum of demand, the amount of penalty are to be redetermined in accordance with the duty demand confirmed in remand proceedings. The matter is remanded back to the adjudicating authority for consideration of the show cause notices in accordance with the observations made in this order. Since matter is pertaining to demand notices issued from the year 2009 onwards, in de novo proceedings Commissioner should adjudicate the matter within six months of receipt of this order, after following the principles of natural justice - Appeal allowed by way of remand.
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