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TMI Blog2020 (6) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... rupees twenty two Iac eleven thousand fifty eight only including education cess/SHEC 3 12,11,624 rupees twelve lac ninety eleven thousand six hundred twenty four only including education cess/SHEC Total 2,12,64,774 rupees two crore twelve Iac sixty four thousand seven hundred seven four on including education cess/SHEC upon M/s. International Merchandising Corporation under proviso to Section 73(1) of the Finance Act. 1994 as amended; (ii) I further confirm the demand of Cenvat credit taken / utilized wrongly amounting to Rs. 16,73,297/- (rupees sixteen Iac seventy three thousand two hundred ninety seven only) against M/s. International Merchandising Corporation, under proviso to Section 73(1) of the Finance 1994 as amended; and, (iii) I drop the demand of service tax of Rs. 1,17,85,167/-(rupees one crore seventeen lac eighty five thousand one hundred sixty seven only) including education cess/SHEC upon M/s. International Merchandising Corporation. (iv) I hereby order for recovery of interest on service tax amount as above at applicable rates on the delayed payment of Service Tax including EC and SHEC from M/s. International Merchandising Corporation under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d penalty is also paid within the same time frame as specified above. (II) In respect of SCN C.No. D-II/ST/R II/SCN/IMC/79/09/924 dated 20.04.10:- (i) I confirm the following demands of service tax of rupees - S.No. Figure in Numbers/Rs. Figure in words 1 11,70,080 rupees eleven Iac seventy thousand eighty only including education cess/SHEC 2 10,35,403 rupees ten Iac thirty five thousand four hundred three only including education cess/SHEC Total 22,05,483 Rupees twenty two lac Five thousand four hundred eighty three only including education cess/SHEC upon M/s. International Merchandising Corporation under proviso to Section 73(1) of the Finance Act. 1994 as amended; (ii) I further confirm the demand of Cenvat credit taken / utilized wrongly amounting to Rs. 5,608/- (rupees five thousand six hundred eight only) against M/s. International Merchandising Corporation, under proviso to Section 73(1) of the Finance Act, 1994 as amended. (iii) I hereby order for recovery of interest on service tax amount as above at applicable rates on the delayed payment of Service Tax including EC and SHEC from M/s. International Merchandising Corporation under the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for recovery of interest on service tax amount as above at applicable rates on the delayed payment of Service Tax EC and SHEC from M/s. International Merchandising Corporation under the provisions of Section 75 of the Finance Act, 1994 from the due date till the date of actual deposit of the said amount. (iii) I impose penalty on M/s. International Merchandising Corporation under the provisions of Section 76 of the Act ibid which shall not be less than two hundred rupees for every day during which such failure continues or at the rate of two percent of such tax per month whichever is higher, commencing with the first day after the due date till the date of actual payment of the outstanding amount of service tax. (iv) l impose a penalty of Rs. 10000/- (rupees ten thousand only) under Section 77 of the erstwhile provisions of Finance Act, 1994 upon M/s. International Merchandising Corporation for various commissions and omissions made by them as referred hereinabove. Such amount of penalty will however not exceed the service tax amount. (IV) In respect of SCN C.No. D-IIVST/R II/SCN/IMC/79/09/1735 dated 23.03.12:. (i) I confirm the following demands of service tax of rupe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) the Finance Act, 1994 as amended; (ii) I hereby order for recovery of interest on service tax amount as above at applicable rates on the delayed payment of Service Tax including EC and SHEC from M/s. International Merchandising Corporation under the provisions of Section 75 of the Finance 1994 from the due date till the date of actual deposit of the said amount. (iii) I impose penalty on M/s. International Merchandising Corporation under the provisions of Section 76 of Act ibid which Shall not be less than two hundred rupees for every day during which such failure continues or at the rate of two percent of such tax per month whichever is which such failure continues or at the rate of two percent of such tax per month whichever is higher, commencing with the first day after the due date till the date of actual payment of the outstanding amount of service tax. (iv) I impose a penalty of Rs. 10000/- (rupees ten thousand only) under Section 77 of the erstwhile provisions of Finance Act, 1994 upon M/s. International Merchandising Corporation for various commissions and omissions made by them as referred hereinabove. Such amount of penalty will, however, not exceed the service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ■ DSM Anti Infectives India Ltd [2017 (4) GSTL 280 (T)] ■ Nizam Sugar Factory [2006 (197) ELT 465 (SC)] ➢ Demand of Service Tax has been made on a reverse charge basis in respect of the services classifiable in three different categories, without quantifying the value of services and service tax payable against each category separately. Such an approach to confirm the demand by taking the value of foreign exchange expenditure yearly for quantifying the demand, rather than determining the expenditure made for each of taxable service is contrary to the decision in the case of Dharambir Singh & Co [2018 (8) GSTL 440 (T)]: ➢ Demand under the category of Manpower Recruitment and Supply Services ○ Demand under this category has been made in respect of payments made to players like Vijay Amritraj for appearance in Chennai Open Tennis Tournament, and paid for secondment of employees of IMC DBA New York, USA for Lakme Fashion Week event organized by them. ○ Demand made in respect of the Fees paid to Vijay Amritraj for appearance in Chennai Open Tennis cannot be sustained in this category as has been held in the case of Airbus Group India Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #9675; Royal Western India Turf Club Ltd [2015 (38) STR 811 (T)] ➢ Further sale of right was made a separately classifiable service under the category as defined by Section 65 (105) (zzzzr) with effect from 01.07.2010. It is settled by the decisions as follows that when a separate category is made taxable from a particular date, without amending any taxable category that existed prior to that date, then it has to be interpreted that earlier entries did not covered the activities now taxable under new category:- ○ Balaji Telefilm Ltd [2016 (46) STR 498 (T)] ○ BBC World Services India Pvt Ltd.[2018-TIOL-607- CESTAT DEL] ○ Radaan Media Works India Ltd [2018-TIOL-2266- CESTAT DEL] ○ CBEC Letter issued under F.No 334/1/2010-TRU dated 26.02.2010 ➢ They organize various events for which they also procure sponsorships. Such sponsorships are covered by the definition of Sponsorship services as per Section 65 (105)(zzzn) of Finance Act, 1994. However sponsorships in respect of sport events are excluded by the exclusion clause, as has been held in case of Vodafone Cellular Ltd [2017 (51) ELT 26 (T)]. Further as in case of payments made by Hita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erwise by a client. ○ It does not make any difference, whether the person is taken for a temporary period or a longer period. ○ In the instant case the word 'Player' has replaced the word 'Manpower' and the event is the place where workforce is required. ○ From above it emerges that FSE has caused availability and presence of the players from outside India. ○ They have been paid an agreed amount. ○ The appellants have not placed on record to suggest that players have participated on their own. But as per the agreement, FSE has caused their participation as per requirement of IMG. ○ Similar scenario involved in the case with regard to appearance and participation of other players/ manpower supplied by outside agency, namely, SFX Sports Group of Texas, USA ○ Similarly, the appellants have paid fee for appearance of fashion experts from outside India. ➢ Intellectual Property Service (Under Reverse charge) ○ On perusal of the documents, it is made out that the Trademark "INDIA FASHION WEEK" is owned by IMC (an Ohio Corporation) USA and they filed an application for registration through an Indian Law firm, whose pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . One of the Sport Events organized by them was the Chennai Open Tennis Tournament. For this event they availed the services of Vijay Amritraj (renowned tennis player) to participate in the opening and closing events of the tournament and also play a charity match to be organized during the course of the tournament. At page 33 of the order, the adjudicating authority has placed on record a certified copy of an invoice attached to the agreement with First Serve Entertainment (FSE) relating to the appearance and participation of Vijay Amritraj (a renowned tennis player) in Chennai Open Tennis Championship 2007. The relevant portion of the agreement is as under : "Appearance and participation: IMG hereby engages FSE for appearance and participation of Amritraj of First Serve in connection with Chennai Open. Amritraj will appear and participate in the opening and closing ceremonies and play in the charity auction match at the Chennai Open. FSE hereby accepts such engagement and agrees to cause Amritraj to appear and participate in the Chennai Open in accordance with all applicable laws and regulations. Fees : in consideration for the participation of Amritraj, IMG agrees to pay FSE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the such vessel such personnel for the said purpose on the terms and conditions mutually agreed upon. Clause 3.1 of the said agreement makes it absolutely clear that the appellant was required to provide certified and experienced officers/crew to the owner of the vessel and the charges were collected for the various categories of crew deployed on per man per day basis as provided in clause 3.12 of the agreement in addition to a consolidated sum of Rs. 4.64 lakhs per calendar month towards supply of 8 officers and 8 crews in terms of clause 5.1 of the agreement. Clause 6.1 also makes it clear that the crews engaged in the ship are the employees of the appellant, who has to ensure payment of wages and other statutory dues, to the employees. Similarly, in the agreement entered into with M/s Pranik Shipping Services Ltd., the appellant was engaged as a Manning Manager for providing competent, certified and experienced personnel on the vessel as required for running and maintenance of the vessel and the agreement was valid for a period of 12 months. The responsibilities included engagement and providing the required personnel including Master, Chief Engineer, other Officers, Petty O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of services received from SFX Sports Group of Texas. 4.8 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. On the contrary, USA company has charged a fees or consideration, from the appellant for providing their employees to appellants for a specific purpose. Hence we have no hesitation in holding that the USA company has provided "Manpower Recruitment and Supply Services" to the Appellant. 4.7 The cases relied by the Appellant do not decide the issue in respect of "Manpower Recruitment and Supply Agency Services" in the facts as presented before us. In the case of Airbus Group Relied upon by the Appellant, is the case wherein, certain employees of the foreign company were deputed by the Forei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds to be addressed is whether such payments made by the Appellant to their USA counterpart can be considered as payment towards provision of any service. 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. In case of Historic Hotel Resorts Private Ltd [2018 (18) GSTL 9 (T)] after considering the past precedents tribunal has held as follows: 4. We have heard both the sides and perused the appeal records. The facts of the case are that the appellant alongwith group companies involved in similar business had an arrangement in writing to procure services which will help the appellant and group companies in sales, marketing and promotion of their business. Such services are provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also emphasized by forming of committee for tariff and quality in which both the contracting parties are representatives. The appellants are providing working capital, staff and management skills to run the facilities. IHC owned the facilities and obtained necessary approvals, licenses, etc. Thus, the pooled resources for a mutual benefit, generated income, which was shared on percentage basis. While discharging one of the responsibilities the appellants reimbursed the expenses on actual basis. We find such arrangement is not liable to service tax under BAS. The overall scope of the agreement indicates that it is not for rendering of service by one to another. Rather a common pool of resources required for running and maintaining the facilities of IHC successfully was attempted in terms of the agreement and the gross revenue is also shared showing the common intent. For such situation, we do not find a service provider service recipient relationship liable to service tax". 6. Similarly, in Reliance Ada Group Pvt. Ltd. vs. CST, Mumbai - IV - 2016 (43) S.T.R. 372 (Tri. - Mumbai), the Tribunal observed as below :- "5.3 Admittedly, the object of the appellant company as per the Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n expenditure towards various facilities like canteen, transportation, etc. were shared among group companies. Such arrangement cannot be considered as activities taxable under "Business Auxiliary Services". In terms of Section 65(19) of the Finance Act, 1994, there should be either promotion or marketing of service or goods and various other auxiliary support services. In the arrangement, as discussed above, for availing certain facilities, the appellant is sharing expenditure with other group companies. There is no promotion activities in such arrangement. The impugned order did not discuss the legal scope of tax entry applicable to the case in hand and the same is not sustainable". 8. On perusal of the Memorandum of Arrangement dated 14/04/1999 and the legal position as discussed in the decided cases mentioned above, we find that there is no taxable service in the arrangement as discussed in the present appeal. ...." In view of the above we do not find merits in the demand confirmed by the impugned order under the category of Management and Business Consultant Services. 4.11 Appellants have contended that the services revenues sought to be taxed under the category of "Progra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to appoint the producer to produce audio visual coverage of the events on behalf of BCCI and the producer has undertaken to produce the audio visual coverage of the events for broadcasting on the terms and conditions stipulated in the agreement. 6.2 As per clause 2.1, BCCI has appointed the producer to exclusively produce the feed for and on behalf of BCCI and the feed means - the live and continuous clean audio and visual television signal of each match as described in detail in clause 3.2 of the agreement. Clause 3.1 of the agreement deals with production services and reads as - "the producer must produce the feed for each match of the events as per the production/technical specification detailed in schedule 3, using the personnel specified in clause 5, using the equipment specified in schedule 3 and otherwise in accordance with this agreement." Clause 3.2 specifies that the feed for each match must be live, continuous and uninterrupted and should be in conformity with the specifications mentioned in sub-clauses (a) to (g) thereof. Clause 4 of the agreement deals with the other obligations of the producer and clause 5 deals with personnel who should be engaged for production. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake image of not only play but also of crowds and other happenings in the stadium. (iii) The images taken by camera are transmitted to vision colour correction unit. Each engineer views the images taken by 4 to 6 cameras. (iv) After processing, these images are transmitted to Director's vision desk and also at action replay unit. Images of all the cameras with their numbers are displayed on monitor wall having various screens supervised by Director. The Director in charge continuously instruct the desk in charge the camera number whose image is to be telecasted. The desk in charge press the button of said camera to send signal through router to satellite uplink unit. (v) The BCR has sound engineer who records all types of sounds through the mike fitted around and on the ground. The Director in charge of sound desk decide the sound to be transmitted to Director's vision desk from where images are transmitted. (vi) The BCR has action replay unit. The images in this unit is also transmitted to Director's vision desk. The images shown through these camera are given colour code. The Director in charge of vision unit keeps on continuously instructing the vision desk in charge the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 2008, 2009 and 2010. Hawkeye Innovations was also required to supply three engineers for the recording of the events and the consideration was paid for supply of the equipment and the personnel for recording purposes. As already noted by us, any service in relation to 'programme producer's services' would also fall within the definition of "taxable service". Therefore, the services provided by Hawkeye Innovations by way of supply of equipment and personnel for recording the live programme and actually participating in such programme would also fall within the definition of 'programme producer's services' and we hold accordingly. 6.7 As regards the contract entered into with IMG S.A., the said agreement was for booking of hotel accommodation and transport of personnel in connection with the recording of cricket matches to be recorded by IMG U.K. These services per se will not qualify as 'programme producer's services' and they are in the nature of supporting services. The contract was a separate one and the service provided and received consisted of booking of hotel accommodation and arrangements for transportation. Therefore, though these services were in connection with the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asting to the general public and it is for the BCCI who has the rights over the programme, to decide and entrust the task of broadcasting to a third party. Thus the third party involved would be the broadcaster who will actually undertake dissemination of the programme produced by the non-resident service providers. This is evident from clause 2.1 of the agreement with Nimbus wherein it is stated that "BCCI appoints the producer to exclusively produce the Feed for and on behalf of BCCI. For the purpose of such appointment, BCCI hereby authorizes the Producer to produce the feed for delivery in accordance with this agreement." Clause 2.3 specifically provides that the rights of the Producer under clause 2.1 do not include the right to transmit the feed or both save to the extent necessary to perform its obligations hereunder including but not limited to the delivery of the feed to the on-site gateway and to the producer's production facility". As per clause 3.3 the producer must deliver the feed for each match to the on-site gateway. By definition, on-site gateway is the satellite uplink point at each venue. From the gateway the broadcaster licenced by BCCI or its media rights partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases the service tax liability was on the service recipient, sponsorship was in respect of a sports event, or the service qualified as export of services. Show Cause Notice wise they submitted as follows: Show Cause Notice dated 20.10.09 20.04.10 20.04.11 23.03.12 Value on which Demand made 9802787 12979364 38938902 5640794 Export of Services 994826 1377230 445419 5640794 Service Tax to be paid by Recipient on reverse charge 1500000 0 0 0 Sponsorship of Sport Event 0 8773784 0 0 Service Tax paid on value 0 282835 4335491 0 Demand Confirmed on Value. 9802787 10151014 38938902 5640794 Joint Secretary (TRU) has vide his D O F No 334/4/2006 dated 28.02.2006, clarified at the time of introduction of the Finance Bill, 2006, proposing the amendments in Finance Act, 1994, to create this category of taxable service, as follows: "3.10 SPONSORSHIP SERVICE: Body corporates or firms involved in business or commerce sponsor events with an intent to obtain commercial benefit or bringing their name or products or services in public image to public attention by associating with a popular or successful event. This is an alternate form of advertise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eparately. 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. Limitation 4.18 Appellants have argued the matter on limitation the crux of their argument can be summarized to state that- ➢ The issue involved is that of interpretation hence extended period should not be invoked; ➢ Second show cause notice could not have been issued by invoking extended period of limitation. 4.19 We are not in position to accept any of the arguments advanced by the appellant. Except for the first show cause notice wherein demand has been made by invoking the extended period of limitation, in all subsequent show cause notices, demands have been made within the normal period of limitation. Hence we do not find any substance in the claim made by the Appellants that subsequent show cause notices have been issued on the same ground for making demand by invoking extended period of limitation. However, as the matter is being remanded back to the Commissioner, Appellants should make the submission in this respect and show to Commissioner that demand in subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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. Natural Justice 4.22 We are also in agreement with the submissions made by the appellants that in respect of the last two show cause notice no effective opportunity for personal hearing has been provided. The letter fixing the date of personal hearing do not mention the show cause notice dated 23.04.2012 and statement of demand dated 23.03.2013. 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 4.22 Appellants have contested the demand of CENVAT Credit made from them in respect of the credit erroneously taken by them on the documents which were not in their name. Their ground of contest is simple that they have already reversed the said amounts taken in their CENVAT account without utilizing them. If the demand is made again it will amount to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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