9911796707
TMI Blog2023 (1) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... upport Service". This view has been taken on the ground that Appellant wear the team clothing which bears the brands/ marks of various sponsors and they are also required to participate in promotional /public events of the franchisee thus they are providing Business Support Service. Based on such reasoning show cause notices were issued to the appellant for demand of service tax. After considering the reply, the adjudicating authority confirmed the service tax demand alongwith interest and imposed the penalties on Appellant. Being aggrieved, an appeal was filed before the Commissioner (Appeals) who vide impugned order-in-appeal rejected the appeal of appellant and upheld the order of the adjudicating authority. Hence, the present appeals before us. 03. On behalf of the appellants, Learned Advocate Shri Saurabh Dixit appeared and argued the matter. He submits that the agreement between the Appellant and franchisee is an agreement of "employment" as can be seen from the clause 2.2 and clause 8.1(b) read with other clauses of the agreement, and the same actually creates the relationship of "employer -employee". Since, Appellant employed by the franchisee and the Appellant agreed upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal activities are ancillary to the main purpose that of playing cricket. The main activities of the Appellant, as per contact, is to play cricket as they spent 95% time for it, the other rights i.e. photography, film, television otherwise recording and performance during contract period including training and press conference granted to IPL and its franchisee are ancillary or incidental thereto, to make it commercially viable. 3.3 He argued that Appellant was in employment of the respective teams and was not an independent service provider. It is settled legal position that services provided by an employee, for the activities undertaken by the employer, for and under the instruction of the employer, cannot be termed as service provided by the employee. That by now plethora of decisions are available, wherein ad verbatim identical agreement clauses were interpreted and it was held that no service tax is leviable on player fees received for participating in IPL and the promotional events were merely incidental to the main activity of playing as a Cricketer in IPL. He placed reliance on the following decisions:- * SOURAV GANGULY 2016 (7) TMI -237 - CALCUTTA HIGH COURT * KPH DRE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id category. 'Support services of business or commerce' has been defined in sub-section (104c) of Section 65 of the Finance Act to mean as follows : "(104c) "Support services of business or commerce" means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational or administrative assistance in any manner, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation. - For the purposes of this clause, the expression "infrastructural support services" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security." 5.1 The issue that arises for consideration is whether the activity carried out by the appellants would be taxable to service tax under Business support service. We find tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The agreement create the relationship of " employer -employee". After carefully considering the facts of the case, we find that the employer - employee relationship cannot be disputed and therefore the decisions relied upon by the Learned Counsel are squarely applicable to the present case. Though there are many cases decided in respect of various cricket players of IPL teams which are on the identical facts and issue of the present case, we reproduce some of case laws as under: * L.BALAJI, S. BADRINATH, DINESH KARTHICK, MURALI VIJAY, VIDYUT SIVARAMAKRISHAN, ANIRUDA SRIKKANTH, SURESH KUMAR, YO MAHESH, HEMANG BADANI, ASHWIN R.C. GANAPATHY, ARUN KARTHIK KBN, KAUSHIK GANDHI, PALANI AMARNATH C, ABHINAV MUKUND 2019(5)TMI-277-CESTAT CHNNAI 7.1 The period of dispute in all the above appeals is 2008-09 to 2010-11; upto 30.06.2010 the service tax was fastened by categorizing the service under BSS whereas, for the period 01.07.2010 to 31.03.2011, the demand is raised by categorizing the same under Business Promotion Service. 7.2 The genesis of the dispute is the tripartite agreement between the Board of Control for Cricket in India (BCCI), franchisee and the assessee the terms and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en there is no change in the nature of services alleged. 7.4 On an overall analysis and in view of our findings herein above, we find that the decision of the Hon'ble Kolkata High Court in the case of Sourav Ganguly (supra) is required to be followed, there exists employer-employee relationship, the players are paid remuneration and therefore, there is no service which is liable to be brought under the tax net for both the periods under the alleged heads. In view of the above, this ground of the department appeals are liable to be dismissed, which we hereby do, he same reasons, there cannot be liability under BPS and consequently, the assessee's appeals are required to be wed and the same are allowed. 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 hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 79; * Balaji Contractor vs. CCE, Jaipur-l1-2017 (52) STR 259; * Sourav Ganguly vs. UOI - 2016 (43) STR 482 (Cal.); Learned counsel also submitted that in fact the appellant-assessee is not providing any service to the franchisee let alone business support service or brand promotion service and the agreement between the appellant-assessee and the franchisee has been misconstrued by the department. 5. On the other hand, learned AR submitted that the department has also filed an appeal against the impugned order on the ground that the department has issued the show cause notice for classifying the service under business support service and once the show cause notice is issued, the entire proceedings has to be confined to whether these services are classifiable under business support service or not. Learned AR further submitted that the Commissioner (Appeals) cannot change the classification of service at the appellate stage and to that extent the order of the Commissioner (Appeals) is also not sustainable in law. 6. After considering the submissions of both the parties and on perusal of the material on record, we find that the show cause notice was issued proposing to demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service'. The Hon'ble High Court of Calcutta held that the Petitioner was engaged as a professional cricketer for which the franchisee was to provide fee to the petitioner. He was under full control of the franchisee and had to act in the manner instructed by the franchisee. The Hon'ble High Court further held that the Petitioner therein was not providing any service as an independent individual worker and his status was that of an employee. Therefore it cannot be said that the Petitioner was rendering any service which could be classified as Business Support Service. The relevant paragraphs of the said decision are extracted as under:- 68. "As regards the remuneration received by the petitioner for playing IPL cricket, in my opinion, the service tax demand raised on such amount under the head of Business Support Service' is also not legally tenable. Accordingly to the Department, the terms of the contract that the petitioner entered into with M/s Knight Riders Sports Pvt. Ltd. would revela that the petitioner's obligation was not limited to displaying his cricket skills in a cricket match. He also lent himself to business promotional activities. Thus he provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny service as an independence individual worker. His status was that of an employee rather than an independent worker or contractor or consultant. In my opinion, it cannot be said that the petitioner was rendering any service which could be classified as business support service. He was simply a purchased member of a team serving and performing under KKR and was not providing any service to KKR as an individual. In this regard, I fully endorse and agree with the order dated 6 June, 2014 passed by the Commissioner of Central Excise (Appeals) Delhi-Ill in Appeal No. 330- 332/SVS/RTK/2014, the facts of which case was similar to the fats of the instant case, excepting that the player concerned in that case was a member of the Chennai Super Kings." [Emphasis Supplied] 71. "In view of the aforesaid, in my view, the remuneration received by the petitioner from the IPL franchisee could not be taxed under business support service." 8. This Tribunal also in various decisions viz. Shri Karn Sharma Vs. Commissioner of Central Excise & S.T, Meerut-l Appeal No. ST/59766/2013-CU(DB) (Tri-Allahabad), Commissioner of Cus, & C. Ex., Goa vs. Swapnil Asnodkar 2018[10] G.S.T.L. 479 (Tri-Mumbai) & U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has received substantial remuneration from IPL franchisee (Knight Riders Sports Pvt. Ltd.) for rendering of promotional activities to market logos/ brands/ marks of franchisee/ sponsors. Such fees/ remuneration have been paid to the petitioner by the franchisee in addition to his playing skills and thus the services rendered by the petitioner are classifiable under the taxable service head of Business Support Services' as per the provisions of Sec. 65(104c) read with Sec. 65(105) (zzzzq) of the Finance Act, 1994. There appears to be inherent inconsistency in such decision of the Respondent No. 3. Sec. 65(105) (zzzzq) pertains to brand promotion whereas Sec. 65(104c) pertains to business auxilary services. They are two distinct and separate categories. As already indicated above, the taxable head of brand promotion was not in existence prior to July, 2010, hence, reliance on that head for levying tax on the amount received by the petitioner from the IPL franchisee is misplaced and misconceived. This is sufficient to vitiate the order." 5. While deciding the above issue Hon'ble Calcutta High Court has held as under: - 69. Further, find from the contract entered into by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
