TMI Blog2019 (5) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... essee - 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 tea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... layer release fees (g) Business Support Services for amount paid to African Earth Events with respect to PR and logistics (h) Amount in respect of gate receipts under Rule 6 (3) (i) of Cenvat Credit Rules, 2004. 3. All show cause notices were adjudicated but show cause notice dt.20.10.2010 was dropped by the adjudicating authority. Therefore, the Revenue is in appeal against the said order. For rest of the period, other show cause notices were confirmed and demand of service tax were raised against the appellant-assessee along with interest and penalties were also imposed. Against the said impugned orders, the appellant-assessee is in appeal. 4. As the show cause notices proposed to demands of service under various heads, therefore, each of heads is discussed separately as under:- (a) the demand of service tax on Central Rights Income. 5. The 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. 5(i). The submission of the Ld. Counsel for the appellant-asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in the case of Secretary, Ministry of Information and Broadcasting vs. Cricket Association of Bengal-1995 (2) SCC 161 wherein it was held that BCCI is not a commercial organization. He relied upon the decision of this Tribunal in the case of CCE, Jaipur vs. Rajasthan Cricket Association and vice versa-2018-TIOL-1345-CESTAT-DEL and Viddarbha Cricket Association vs. CCE-2015 (38) STR 99 (Tri.-Mum.). 6. We have gone through the agreement and find that the agreement is in nature of Revenue sharing and the said issue has been examined by this Tribunal in the case of Mormugao Port Trust (supra) wherein this Tribunal has observed as under:- 17. The question that arises for consideration is whether the activity undertaken by a co-venture (partner) for the furtherance of the joint venture (partnership) can be said to be a service rendered by such co-venturer (partner) to the Joint Venture (Partnership). In our view, the answer to this question has to be in the negative inasmuch as whatever the partner does for the furtherance of the business of the partnership, he does so only for advancing his own interest as he has a stake in the success of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses of a group of persons aggregating for identified common objectives will not meet the criteria of taxation under Finance Act, 1994 in the absence of identifiable service that benefits an identified individual or individuals who make the contribution in return for the benefit so derived. 13. Neither can monetary contribution of the individuals that is not attributable to an identifiable activity be deemed to be a consideration that is liable to be taxed merely because a club or association is the recipient of that contribution. 14. To the extent that any of these collections are directly attributable to an identified activity, such fees or charges will conform to the charging section for taxability and, to the extent that they are not so attributable, provision of a taxable service cannot be imagined or presumed. Recovery of service tax should hang on that very nail. Each category of fee or charge, therefore, needs to be examined severally to determine whether the payments are indeed recompense for a service before ascertaining whether that identified service is taxable. 19. We are accordingly of the view that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of business or commerce. 9. Therefore, on central rights income, no service tax is payable by the appellant-assessee. Therefore, the demand on that ground is set aside and in Appeal No.ST/597/2012, the Commissioner has rightly dropped the demand against the appellant-assessee. (b) fee paid to overseas players. 10. The Revenue sought to demand service tax from the appellant-assessee for the fee paid to overseas players under the category of Business Support Service. 11. The case of the appellant-assessee is that they are under the obligation to raise a team of 16 players for which the appellant-assessee entered into an agreement with various players including players of foreign origin. The agreement specified that the players were engaged as professional cricketers and will be provided with player fee. The players were given a consolidated consideration for fulfilling all their obligations under the agreement, which included playing cricket and participating in league activities relating to promotional events. The players spent majority of their time playing cricket which is not taxable service. If a player is una ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity has confirmed the demand under the said category whereas at the appellate stage, the Commissioner (appeals) has changed the classification from business support service to brand promotion service suo motu and unilaterally which is not permitted under law. Further, we find that this issue has been settled in favour of the assessee by various decisions relied upon by the appellant-assessee cited supra. Therefore, by following the ratio of the said decisions, we are of the considered opinion that the impugned order passed by the Commissioner (Appeals) going beyond the show cause notice is not sustainable in law and, therefore, we set aside the impugned order and allow the appeal of the appellant-assessee. We also find that the department is also holding the view that the appellant is not liable to tax under the category of brand promotion service. Consequently, we do not find any merit in the departments appeal in view of the various decisions cited supra. 15. Therefore, we hold that on player s fee, no service tax is payable by the appellant-assessee and in Appeal No.ST/597/2012, the Commissioner has rightly been dropped the demand of service tax on player s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er temporarily or otherwise to a client, in the present case, the respondent cannot be said to be a commercial concern engaged in providing such specified services to a client. It is true that the definition is wide and would include any such activity where it is carried out either directly or indirectly supplying recruitment or manpower temporarily or otherwise. However, fundamentally recruitment of the agency being a commercial concern engaged in providing any such service to client would have to be satisfied. In the present case, facts are to the contrary. 18. 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. (d) Demand of service tax of ₹ 58,69,790/- on the amount received as sponsorship service. 19. Ld. Counsel for the appellant-assessee submits that the appellant-assessee entered into an agreement with Emirates, Dubai for granting the sponsorship rights of the cricket team of the appellant to Emirates. Under the agreement, Emirates had the right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate hospitality area. Although the said activity had incorporated in sponsorship service as per Section 65 (105) (zzn) of the Finance Act, 1994 which is reproduced as under:- (105) taxable service means any service provided or to be provided,- (zzzn) to anybody corporate or firm, by any firm receiving sponsorship, in relation to such sponsorship, in any manner, but does not include services in relation to sponsorship of sports events. 23. 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. (supra), therefore sponsoring of IPL team is not covered under sponsorship of sport event. 24. We further take note of the fact that 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, we hold that the demand under the category of sponsorship service is not sustainable. (e) Demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant-assessee do not fall under the category business auxiliary service or under any of the sub clauses. The payment made to overseas agencies is not a commission but a predetermined fee for securing players for the appellant-assessee. Moreover, the overseas agencies are not causing any sale, purchase of goods or providing services on behalf of the appellant-assessee. Therefore, it cannot be said to be operating as a commission agent. 28. We find 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 servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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