Custom, Excise & Service Tax Tribunal
Jsw Gmr Cricket Pvt Ltd vs Commissioner, Cgst-New Delhi on 13 March, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
New Delhi
PRINCIPAL BENCH - COURT NO. 4
Service Tax Appeal No. 50918 Of 2021
[Arising out of Order-in-Original No. 07/Commr./CGST-Audit-I/2021 dated
26.02.2021 passed by the Commissioner of Central Goods Service Tax, Audit-I
Delhi]
JSW GMR Cricket Private Limited : Appellant
8B, Ground Floor, Tej Building, Bahadurshah
Zafar Marg, Near ITO, New Delhi-110002
Vs
Commissioner of Central Goods, Service : Respondent
Tax, New Delhi C. R. Building, IP Estate, New Delhi-110109 APPEARANCE:
Shri Sparsh Bhargava, Ms. Vanshika Taneja, Advocate for the Appellant Ms. Jayakumari, Authorized Representative for the Respondent CORAM :
HON'BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL) HON'BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) FINAL ORDER No. 50408/2025 Date of Hearing:03.12.2024 Date of Decision:13.03.2025 HEMAMBIKA R. PRIYA M/s. JSW GMR Cricket Private Limited1 is filing the present appeal challenging the Order-in-Original 07-Commr./CGST Audit- 1/2021 dated 26.02.2021 passed by the Commissioner of Central Goods & Service Tax, Audit 1, Delhi wherein the demand of service tax of Rs. 18,66,21,879/- on Central Right Income, CLT20 Participation Fees and prize money received from the Board of Control for Cricket in India-India Premier League was confirmed along with demand of Rs. 1 the appellant 2 Service Tax Appeal No. 50918 Of 2021 2,59,89,925/- on the Support Services of Business provided by overseas cricket professionals under reverse charge mechanism. The Order-in-Original also held that the appellant liable to pay service tax of Rs. 34,51,002/- on player release fee paid to overseas cricket board under reverse charge basis, Rs. 56,38,220/- on player transfer fee received from other franchisees.
2. The brief facts of the case are that the Appellant is a company incorporated under the provisions of the Company Act, 1956 having its registered office at M/s JSW GMR Cricket Pvt. Ltd. 88, Ground Floor, Tej Building. Bahadurshah Zafar Marg, Near ITO, New Delhi -110002.
The appellant was engaged in the activities relating to sports including provisions of sports infrastructure, consultancy, organizing sports events, maintaining sports teams, construction, maintenance and taking on or leasing out stadiums (Indoor and outdoor) or player's ground, providing coaching to players, engaging umpires, ground men and undertaking other related sports and cultural activities etc. The Appellant is one of the Franchisee of the Indian Premier League organized by Board of Control of Cricket and therefore, is obligated to BCCI to form a team of Cricket players to participate in the tournament i.e. IPL. The Appellant was registered with the Service Tax Department, Delhi vide Registration No AADCG0588PST001 w.e.f. 18.03.2009. Initially the Appellant took registration under the category of Taxable Service of "Membership of club" and subsequently got registered in other category of services as well namely: Intellectual property right services other than copyright, Renting of immovable property, Management Consultancy Service, Franchise Services. Other taxable services and Business Auxiliary Services w.e.f. 12.04.2009. 3
Service Tax Appeal No. 50918 Of 2021 The appellant entered into a Franchise Agreement dated 10.04.2008 with the BCCI (a society registered under The Tamil Nadu Societies Registration Act, 1975). BCCI entered into the agreement through its separate sub-committee unit known as the IPL wherein upon payment of Franchisee consideration, the Appellant was granted right to operate a Franchise at Delhi and participate in the League i.e. Twenty-20 Cricket League. BCCI had executed similar Franchise Agreements with other Franchisees in other territories. Under the Franchisee Agreement, the Appellant was required to engage players (both Indian and Foreign) as part of its cricket team for playing cricket. For engaging a foreign player, adequate permission had to be obtained from the respective overseas cricket board. The Appellant was required to make payments to overseas cricket board to engage these foreign players. The Appellant had discharged the service tax liability with effect from 01.07.2012 on amounts paid to overseas cricket board/body. Once the players were included in the team, they can be permanently transferred to other Franchisees for which the transferring Franchisee received a certain player transfer fee. Further, such transfers were allowed under the BCCI-IPL Regulations and by such transfer the team owner transferred all rights and obligations available in respect of any player in favour of other team owner. The transfer of players was not temporary but permanent and cannot be recalled by the transferor Franchisee. If the team owner is not satisfied with the performance of the player, he player can be offered for transfer. Such transfer is initiated by the team wanting to alienate a player and not the transferee Franchisee. During the course of audit, 4 Service Tax Appeal No. 50918 Of 2021 the team noticed that the appellant was not paying service tax on services;
2. The noticee is obliged to comply with the provisions of the Finance Act, 1994 and various Rules and Notifications issued thereunder. Audit of the noticee, for the year 2009-10 to 2011-12 extended up to 2013-14 was conducted under Rule 5A of the Service Tax Rules, 1994, as amended (hereinafter referred to as the "Rules"). During the course of audit, following infractions were noticed which are discussed in the succeeding paras:
A. Non-payment of service tax on Central Right income, CLT20 Participation Fees and Prize money received from Board of Control for Cricket in India - Indian Premier League (herein after referred to as BCCI-IPL) B. Non-payment of service tax on the Support Services of Business provided by overseas cricket professionals under reverse charge mechanism.
C. Non-payment of service tax on Player Transfer Fees received from other Franchisees.
D. Non-payment of service tax on Player Release Fees paid to Cricket Australia under reverse charge mechanism."
Consequent to the investigations, the show cause noticed dated 23.04.2015 was issued proposing demand of service tax amounting to Rs.22,17,01,026/-, the impugned order dated 26.02.2021 confirmed service tax demand under several heads. The present appeal filed by the appellant before this Tribunal.
3. Learned counsel for the appellant submitted that the impugned order has been passed in an unfair and arbitrary manner on issues which are already settled by the Tribunal, Chandigarh bench in favour of the Appellant. He submitted that the issues and allegations confirmed in the Impugned Order are covered by the judgment of the Hon'ble Tribunal in KPH Dream Cricket Pvt. Ltd. Vs. CCE & ST, 5 Service Tax Appeal No. 50918 Of 2021 Chandigarh2. Learned counsel also submitted that the appellant had placed this Order before the Commissioner, but the Ld. Commissioner erred in not considering the Order of the Tribunal. Thus, the Impugned Order is arbitrary and illegal and liable to be set aside. He further contended that the Tribunal in KPH Dream Cricket (Supra) had decided identical issues where service tax was demanded, viz., on Central Rights Income, service tax on fee paid to overseas players under the category of „Business Support Service‟, demand of service tax on player transfer fee under the category of manpower recruitment or supply agency service, Demand of service tax on the player release fee paid to overseas cricket board under the category of „manpower recruitment or supply agency service‟.
3.1 Learned counsel further submitted that the Commissioner has completely erred in understanding the facts of the present case holding that in the absence of the team created by the Appellant and other franchisees, BCCI IPL could not have held the league and generated revenue and what could have been managed by BCCI IPL, was outsourced to the Appellant. He submitted that the appellant, who is the Franchisee had paid Franchise Consideration under Clause-T of the Franchise Agreement and it is because of this agreement, that the Appellant has received a right to earn by participation in the IPL T20 League. He further submitted that the BCCI-IPL had paid applicable service tax on the consideration received from the Appellant towards Franchise Consideration. The Franchise Agreement had carved out a special category of Central Rights and these mean those of the rights relating to the league which are to be exploited by BCCI IPL from time 2 Final Order no. 60532-60536 / 2019 dated 21.5.2019 6 Service Tax Appeal No. 50918 Of 2021 to time, and comprise, inter-alia, Media Rights, the Umpire Sponsorship Rights, the Title Sponsorship Rights, the Official Sponsorship Rights, the right to sell Stadium Advertising (other than as contemplated by paragraph 8 of Schedule 3) and the Games Rights. Both the parties under Clause 4.1 had agreed that BCCI-IPL shall have the exclusive right to exploit the Central Rights as owners. He stated that the Appellant along with other franchisees were entitled to 87.5% of all Central Licensing Income in respect of such income and only 12.5% was being retained by BCCI IPL. Therefore, the retention by BCCI IPL is in relation to management fees/administrative charges. The receipt of share of Central Rights Income by the appellant as a franchisee under the Franchise Agreement do not qualify as „Business Support Service‟.
3.2 Learned counsel further contended that the Commissioner has wrongly upheld the service tax demand on income received by the Appellant from Central Rights under the Franchise Agreement by categorizing the same as Business Support Service and the Commissioner has completely ignored the clauses of the Agreement including the recitals which makes it abundantly clear that the Appellant is not providing any business support to BCCI IPL. He submitted that the Franchise as defined in clause 1.1 of the Agreement is for establishing and operating the team pursuant to and as contemplated by this Agreement. Further, in order to become a franchise, the Appellant was required to pay a sum of Rs. 10,08,00,000/- as League Deposit and a sum of Rs. 23,52,00,000/- per year for each year when the league is played as consideration for grant of the franchise. He submitted that under the Franchise 7 Service Tax Appeal No. 50918 Of 2021 Agreement, the Appellant is granted many rights to exploit along with many obligations and one such obligation is to maintain and operate a cricket team for playing in the matches. It was further submitted that the agreement recognizes 'Central Rights' under Clause 1.1 of the Franchise Agreement, as those rights which are to be exploited by BCCI-IPL and include media rights, umpire sponsorship rights, title sponsorship rights, official sponsorship rights, right to sell stadium advertising etc. Apart from this, BCCI-IPL also has the right of central licensing which relates to grant of right to any person to sell products or services bearing or associating with the league marks/trademarks or logos relating to any team. The Ld. Commissioner had failed to understand that the BCCI-IPL acts as a custodian of the revenue received from these rights throughout the league matches and once the league is over, BCCI-IPL distributes the revenue among the Franchisee equally (after deducting the league expenses incurred by BCCI-IPL) and also on the basis of final league standing. In return, BCCI-IPL keeps a nominal share as per Clause 8 of the Franchise Agreement of the income as common custodian of the revenue earned from exploitation of Central Rights. Consequently, the income generated from Central Rights does not belong to BCCI-IPL and was the Appellant's income. Learned counsel further stated that from the inception of the T20 League, the income so generated from Central Rights is meant to be the Appellant's income, which although collected by BCCI-IPL, is later distributed to the Appellant along with other Franchisees.
3.3 Learned counsel for the appellant also submitted that the Commissioner had confirmed the demand on the participation fee 8 Service Tax Appeal No. 50918 Of 2021 without examining the submissions of the Appellant and without providing any finding whatsoever. Learned counsel contended that no service tax was payable on the participation fee received by the Appellant. CLT20 is distinct Cricket League from the T20IPL and is defunct from 2015 onwards. Further, CLT20 was managed by BCCI along with other cricket boards viz. Cricket Australia and Cricket South Africa. The Participation Fee was the money received by the Appellant for playing cricket in CLT 20 tournament and in no way was attributable to providing any support services to BCCI-IPL. In fact, he stated that the participation fee was receivable only by those teams who make to the CLT20 tournament and not by all the Franchisee teams. Therefore, the participation fee cannot be said to be in the nature of the support services that can be covered under the entry 'Business Support Service.
4. Learned Authorized Representative for the Revenue while reiterating the findings of the impugned order, submitted that huge revenue is being generated by the BCCI-IPL Twenty-20 cricket league with the participation of different playing teams raised by each of the franchisee including the one raised by the appellant. One of the conditions of the agreement executed between the franchisees and BCCI-IPL is that all of them including the appellant were required to raise cricket team comprising of 16 players for participation in the said league. In the absence of these teams, BCCI-IPL could not have held the T20 League. Besides, the appellant were obligated to stage all home league matches on behalf of BCCI-IPL and allow BCCI- IPL to use their trademark/logo/HR rights for merchandise/services branding. The holding of the IPL League matches generated huge revenue under 9 Service Tax Appeal No. 50918 Of 2021 certain heads, such as sale of media rights, umpire sponsorship rights, title sponsorship rights, official sponsorship rights, right to sell stadium advertising, games rights etc. and were called as "Central Rights". These Central Rights were exploited exclusively by BCCI-IPL, but revenue generated therefrom was shared in pre-agreed proportion with all the franchisees. This share of revenue was only admissible to the appellant when their team participates in the League, stages their home league match on behalf of BCCI-IPL and allows BCCI-IPL to use their trademark/logo/IPR rights for merchandise/services branding. Thus, it was clear that it is because of the active support of the appellant, BCCI-IPL successfully conducted the matches and generated the resultant revenue. In the Agreement itself, the activity to be undertaken by both the franchisee and the franchisor i.e. conducting of IPL Twenty 20 Cricket league has been termed as "Business" as per clause 9 wherein the words used are "Business undertakings" and "Relevant Business". Thus, the remuneration received by the franchisee from the "Central Rights" pool is for providing the aforesaid services which helped in generating the huge revenue to BCCI-IPL and as such appropriately covered under the category of "Support Services of Business and Commerce".
4.1 Learned Authorized Representative further contended that the appellant had contracted foreign players and made payments to such players in foreign currency and was not paying service tax on the above transactions. However, they started paying service tax on such transaction from April, 2011 onwards. Therefore, learned Authorized Representative contended that it was essential to go through the terms of these agreements to get an insight into the exact nature of 10 Service Tax Appeal No. 50918 Of 2021 these transactions. He also submitted that in terms of the Franchise Agreement, it was obligatory on part of the appellant/(Franchisee) to raise a team of 16 players and in furtherance to that obligation, appellant had entered into contracts with various foreign as well as Indian players. The clauses of these contracts were similar to each other and the contracts had been framed in the same fashion and style. From the terms/conditions of the above player‟s contacts, it was clear that the individual players have provided taxable services to the appellant by wearing apparels in the form supplied by the appellant and taking part in team endorsement events and other activities like sponsorship media and promotional activities referred to in the player agreement. BCCI-IPL and its franchisees are Business entities and are engaged in such business and commercial activities. The players have rendered their services in the capacity of professional cricketer to the appellant, a franchisee of BCCI-IPL for supporting their business. Therefore, the Commissioner had held that the activities carried out by players clearly fall under the category of "Support Service for Business or Commerce" as defined under section 65 (104c) of the Finance Act, 1994 and the same is liable to service tax as provided in section 65(105)(zzzq) of the Finance Act, 1994.
4.2 Learned AR further contended that the appellant had discharged their liability w.e.f. April, 2011 on an amount calculated @ 10% of the total amount being paid to the foreign players. This liability had been discharged under the taxable category of Promotional or Marketing of a Brand, which other-wise should have been discharged under the head of Support Services of Business and Commerce. Learned AR submitted that prior to April, 2011. the appellant was not discharging 11 Service Tax Appeal No. 50918 Of 2021 any liability for the said services, nor were they registered for this category of Support services of Business and Commerce under the Service Tax Rules, 1994. The Sponsorship, Media and promotional activities were being carried out by the players since the beginning of the appellant‟s business consequent to the grant of franchise right. However, no separate value was reflected in the Playing Contract, dated 06.04.2009 with the player. Whereas, from 17.11.2010, the appellant had earmarked an amount of 10% of the player fee attributable to player's performance for the obligation discharged towards the obligation of Sponsorship, Media and promotional activities. Hence, he prayed that there was no infirmity in the impugned order.
5. We have heard the learned counsel for the appellant and the learned Authorized Representative for the Department and perused the case records.
6. The details of demand under various issues are as under:-
Sr. Issue Amount No. 1. Service Tax on the appellant share in the Central Rs. 18,66,21,879/-
Rights Income, CLT20 Participation Fees and prize money received from BCCI-IPL in organizing the IPL tournament‟ [under „Business Support Services‟ (BSS)]
2. Service Tax on Support Services of Business provided Rs. 2,59,89,925/-
by overseas cricket professionals under reverse change mechanism for wearing apparel, taking part in endorsements and other activities [under „Business Support Services‟(BSS),] 3 Service Tax on player release fees paid to Cricket Rs. 56,38,220/-
Australia under reverse charge mechanism [under manpower Recruitment or Supply Agency Services]
4. Service Tax on player transfer fee received from Rs/ 34,51,002/-
other franchisees [under Manpower Recruitment or Supply Agency Services] Total Rs. 22,17,01,026/-
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7. We take up each issue for consideration. The first issue relates to the demand of the service tax on the appellant‟s share in Central Rights Income, CLT 20 participation fees & prize money received from BCCI-IPL. With respect to the said issue, we note that this Tribunal in the case of Knight Riders Sports Private Limited vs. Principal Commissioner of Service Tax-IV, Mumbai3 held as follows:-
"With regard to the first issue whether, receipt of the appellant's share in the Central Rights Income should be considered as consideration as provision of the Business Support service, we find that the said issue has already been dealt with by the Coordinate Bench of this Tribunal, in the case of KPH Dream Cricket Pvt. Ltd. v. CCE & ST, Chandigarh-I (vice-versa), 2019 (5) TMI 1171 -CESTAT Chandigarh = 2020 (34) G.S.T.L. 456 (Tri Chan.). Upon consideration of such issue, the Tribunal by relying upon the decision of the Tribunal in the case of Mormugao Port Trust v. CCE -2017 (48) S.T.R. 69 (Tri.-Mum.) has set aside the demand holding that in case of joint venture contract, there is neither an intention to render a service to the other partner(s) nor is there any fixed consideration quid pro quo for any particular service of a partner. It has further been held that a contractor-contractee or the principal-client relationship, which is the essential element of any taxable service, is absent in the case of the partners or co-venturers in a joint venture agreement. In the present case, since the demand of Rs. 16,71,71,797/- in respect of Central Rights Income arising out of the franchise agreement cannot be considered as provision of any service between the members to the franchise agreement, we are of the view that such demand cannot be confirmed on the assessee-appellants."
7.1 We also note that the Tribunal has taken identical view in the following decisions:-
Knight Riders Sports Private Limited vs. Pr. Commissioner of Service Tax-Mumbai4 3 2024 (17) CENTAX 315 (Tri.-Bom) 4 2023-VIL-581-CESTAT-MUM-ST 13 Service Tax Appeal No. 50918 Of 2021 JAIPUR IPL Cricket Private Limited vs. Pr. Commissioner of Service Tax5 M/s India Cements Limited vs. CCE, Chennai6 Ishant Sharma vs. CCE7
8. As regards the second issue regarding service tax on support services provided by the overseas players, we observe the same is no more res-integra. The Tribunal in Kinight Rider Sports Private Limited (supra) held as follows:-
"The second issue is with respect to payment of service tax under the taxable category of Business Support Service by the assessee-appellants in the capacity of recipient of service under Reverse Charge Mechanism (RCM). We note that it is not in dispute that the assessee-appellants have entered into an agreement with individual foreign players and other professionals as a franchisee, wherein they have engaged those players as a professional cricketer. The aforesaid agreement also provided for the players, to wear 'team clothing', to participate in media, sponsorship and the promotional activities of the franchisee. The learned Principal Commissioner in the impugned order had concluded that such activities of the players are in the nature of support service in marketing the franchisee's trademark/logo and thus contribute to the promotional activities. Accordingly, in terms of specific clause in the agreement Indicating 10% of the total fees being payable to the player, when he does not happen to play even a single match, thereby attributing this part of 10% as consideration for promotional activities confirmed the demand of service tax for an amount of Rs. 47,55,082/- relying on the instructions of CBIC dated 26-7- 2010, while dropping the demand on the balance 90% of fees attributing the same to sports activity of playing cricket. We find that the said issue has already been dealt with by the Co-
5 2024 (14) CENTAX 27 (Tri.-Mum.) 6 2023-VIL-819-CESTAT-(Tri.-Chennai) 7 ST/246/2016 and ST/50331/2016 decided on 11.08.2023 14 Service Tax Appeal No. 50918 Of 2021 ordinate Bench of this Tribunal, in the case of Sourav Ganguly v. Commissioner of Service Tax, Kolkata (Now Commissioner of Central Goods & Service Tax & Central Excise, Kolkata South), 2020 (12) TMI 534CESTAT Kolkata, wherein it was held that the view taken by the commissioner is not correct as the players had received the fees for the purpose of playing cricket only and even otherwise, it is a settled principle of law that if no machinery provision exists to exclude non-taxable service (playing cricket) from a composite contract, the same is not taxable since law must provide a measure or value of the rate to be applied and any vagueness in the legislative scheme makes the levy fatal.
Thus, the Tribunal held in this case that the confirmation of demand could not be sustained. Considering that the ratio of the above decision squarely applies to the present case in hand, we are of the view that the confirmation of demand Rs. 47,55,082/- towards fees paid to foreign players on RCM basis and Rs, 20,13,565/- to the agents of foreign players are not sustainable."
9. Regarding the third issue, we note that the core requirement that the service which is provided or to be provided, must be by a manpower recruitment or supply agency has been missed. Moreover, such a service has to be in relation to the supply of manpower. The appellant paid player release fees to Cricket Australia. The same cannot be regarded as Manpower Recruitment or Supply Agency Service as already held by the Tribunal in KPH Dream Cricket Private Limited vs. KPH Dream Cricket Private Limited, Chandigarh8.
"25. Ld. Counsel submits that the demand has been confirmed against the appellant-assessee on the fee paid to overseas cricket board for release of player under DLF IPL Player Regulations to enable those players to play matches other than the ones conducted by their respective 8 2020 (34) GSTL 456 (Tri.-Chan) 15 Service Tax Appeal No. 50918 Of 2021 Cricket Boards. The said player can enter into an agreement with the appellant-assessee only after seeking permission from its respective Board. The said has been reverse charge mechanism on the amounts paid to these cricket boards. The said demand is unsustainable for the reason that the overseas cricket boards are not engaged in providing services in relation to supply of manpower, which should be the essence of the agreement. Further, the players are not employees of these cricket boards and are only registered with them. He has also relied on the C.B.E. & C. Circular No. 96/7/2007-S.T., dated 23-8-2007 to say that manpower should be contractually employed by manpower recruitment agency. He prayed that no service tax is payable under the category of „Manpower Recruitment or Supply Agency Service‟.
26. As discussed above, hereinabove, neither cricket board nor the appellant-assessee are engaged in providing Manpower Recruitment or Supply Agency Service‟ of employees. Therefore, no service tax is payable by the appellant-assessee as held by the Hon‟ble Gujarat High Court in the case of Arvind Mills Ltd. (supra)."
10. The fourth issue relates to demand of service tax on transfer received from other franchisees on reverse charge mechanism as Manpower Recruitment or Supply Agency Service, we go on to note that the same is no more res-integra as the Tribunal in KPH Dream Cricket (supra) held as follows:-
"(c) Demand of service tax on player transfer fees under the category of manpower recruitment or supply agency services.
16. The contention of the Ld. Counsel for the appellant is that the appellant-assessee received the amount on account of transfer of Mr. Dinesh Kartik to Mumbai Indians. The demand raised under the category of „Manpower Recruitment or Supply Agency Service‟. It is his submission that the appellant-assessee merely owns a franchise and ensures that 16 Service Tax Appeal No. 50918 Of 2021 the players forming the team in the matches organized by BCCI-IPL. When the player is transferred to another team, the appellant-assessee retains no right over him and the said player is obliged to undertake the activities as required by the other team. In fact, the player is simply sold to another team and that player does not play for the appellant-assessee for the entire period specified in the agreement. It is further submitted that the appellant-assessee is not engaged in providing services in relation to recruitment or supply of manpower i.e. the same is not its principal business. The appellant-assessee had not control over the player once the same is transferred to another team. Therefore, the activity cannot be taxed under the „Manpower Recruitment or Supply Agency Service‟. To support this, he relied upon the decision of Hon‟ble Gujarat High Court in the case of CST v. Arvind Mills Limited - 2014 (35) S.T.R. 496 (Guj.).
17. We have heard the Ld. Counsel for the appellant- assessee. We find 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 team as held by the Hon‟ble Gujarat High Court in the case of Arvind Mills Limited (supra) wherein Hon‟ble High Court observed as under :-
"6. We have to examine the definition of Manpower Supply Recruitment Agency in background of such undisputable facts. The definition though provides that Manpower Recruitment Supply Agency means any commercial concern engaged in providing any services directly or indirectly in any manner for recruitment or supply of manpower 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 17 Service Tax Appeal No. 50918 Of 2021 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."
11. We now take up the submissions on limitation. We note that a show cause notice under Section 73 can be issued only within a period of 18 months from the relevant date i.e. the date when the return is filed. The instant notice dated 23.04.2015 covers period from 2009-10 to 01.06.2012 and the date of filing returns is as under; -
Period Date of Filing 18 months expiry April 2009-September 2009 26/10/2009 26/04/2011 October 2009-March 2010 26/04/2010 26/10/2011 April 2010-September 2010 19/10/2010 19/04/2012 October 2010-March 2011 10/05/2011 10/11/2012
It has been submitted before us that the fact that the department was well aware of all streams of receipts and the taxes paid by the Appellant is established-
a. Instruction No. Dy/NO. 42/Comm (ST)/2008 dated 08.02.2008 wherein the Board had issued instruction for verification of facts and collection of service tax applicable on the franchisee/event. b. Letter No. F.No. / DGST/21(75) /Sponsorship/02/07/Mumbai dated 15.01.2009 wherein the Director General Service Tax has highlighted issues in respect of the IPL to various Commissionerates including Delhi.
c. Standing Committee on Finance, as quoted at Page 31 in 38th report on Tax Assessment/Exemptions and Related matters concerning IPL/BCCI (August 2011), wherein the Board has stated 18 Service Tax Appeal No. 50918 Of 2021 that it has been vigilant since beginning of IPL and issued show cause notices where the opinion of department on taxability is different from that of assessed.
d. The Department from time to time sought details from the Appellant which were regularly submitted.
12. We observe that these submissions have not been considered by the adjudicating authority. The table as submitted by the learned counsel is reproduced below:-
Sr. No. Date on which Date on which Particulars notice received reply filed
1. 15.05.2008 18.06.2008 The Appellant received a letter dated 15.05.2008 issued by the Assistant Commissioner wherein the Appellant was asked to submit a detailed write up on its role in IPL.
The Appellant vide reply dated 18.06.2008 submitted that the Appellant was a successful bidder in a bid organized by BCCI-IPL and thereafter was granted a Franchisee of Delhi team. The Appellant further explained various rights granted to under the Franchise Agreement viz.
to carry on the business under the Franchisee arrangement, to be the only team whose home stadium is located in the territory during a period of not less than three seasons etc. It further submitted that the agreement is valid for 10 years starting from 2008 and the consideration paid for obtaining the Franchise was Rs. 33.6 Crores per year.
2. 4.8.2008 20.08.2008, Letter providing the accounting 27.08.2008 summary of the League matches involving the Appellant and list of service provider with the amount paid as on date with contact details, list of service receivers with the amount received by the Appellant, Details of misc. Income received, details of payment made to India & 19 Service Tax Appeal No. 50918 Of 2021 Foreign Player & Coaches.
3. 24.09.2008 Letter submitting details of Trial Balance as on 23.09.2008 & payment to Player & Coaches and details of TDS deducted upon such payment.
4. 11.01.2009 The Appellant vide letter dated 11.01.2009 submitted the details CENVAT Credit availed on inputs/input services in respect of collecting gate receipts for the matches organized by the Appellant.
It was further clarified in the reply that the Appellant has not provided any other service apart from the services mentioned in letter dated 28.12.2009. It was further submitted that the Appellant is earning revenue from other activities which are not services namely, central media rights, sponsorship prizes, sale of tickets, miscellaneous income from renting of immovable property, player's transfer fees and interest income.
5. 29.01.2010 06.03.2010 The Appellant vide letter dated 08.02.2010 06.03.2010 submitted that engaging the foreign cricket players for playing cricket match in India is not leviable to service tax under the category of Business Support Service and service tax is not payable under reverse charge mechanism. It was further submitted that Indian players are not under any obligation to pay service tax.
6. 04.05.2010 19.05.2010 Details of Income received during IPL-2, IPL-3 along with details of service tax paid, details of invoices raised against the revenue realized and details of services provided to the appellant.
7. 11.06.2010 22.06.2010 The appellant submitted the details of invoices raised and sponsorship agreement entered by the appellant with various entities during IPL-2 & IPL-3.
8. 22.06.2010 29.11.2010 The appellant submitted the details of player who played IPL-3, copy of the service tax for the period from 01.04.2010 to 30.09.2010 and details of payment received from BCCI-IPL in respect of Central Media Rights.
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9. 13.07.2010 20.07.2010 The appellant submitted the contract details and address of the sponsors of IPL-2 and IPL-3.
10. 31.08.2010 17.09.2010 The appellant submitted that the invoice raised towards services provided by wriglays is without service tax as service tax is discharged by Wrigleys under Sponsorship Services under reverse charge mechanism. Further, the appellant enclosed the challans of service tax as proof of payment of service tax paid by Wrigleys.
11. 05.05.2014, 23.05.2014 The appellant submitted the copy of 15.05.2014 contract with Amity University from the year 2010 to 2014 and details of invoices raised by the appellant.
A Perusal of the facts in table above reveal that the appellant had disclosed all relevant facts and Department was well aware of the receipts, on which the appellant was not paying service tax and reasons for the same. Therefore, the averments and findings that department became aware because of audit or that the Appellant suppressed any facts is incorrect. Consequently, we hold that the demand is also barred by limitation.
13. Accordingly, we set-aside the impugned order and allow the appeal.
(Order pronounced in the open Court on 13.03.2025) (DR. RACHNA GUPTA) MEMBER (JUDICIAL) (HEMAMBIKA R. PRIYA) MEMBER (TECHNICAL) G.Y.