Customs, Excise and Service Tax Appellate Tribunal, Kolkata: In an appeal filed by the appellant challenging the demand confirmed by the Adjudicating Authority in the impugned order, the Bench of Ashok Jindal, Member (Judicial) and K. Anpazhakan, Member (Technical), observed that all these activities undertaken by the appellant were for generating revenue with the aim of promoting the cricket. The Tribunal stated that the appellant earned money only when these services were provided during cricket matches. Thus, the Tribunal held that the appellant had rendered ‘bundled services’ in connection with promoting the game of cricket.
The Tribunal stated that since services rendered in promotion of sporting events was exempted from the levy of Service Tax prior to 30-06-2012, therefore, no service tax was payable by the appellant. The Tribunal held that the appellant was not liable to pay service tax for services rendered by them in connection with sports. Thus, the Tribunal held that the demands had been rightly dropped by the adjudicating authority. However, the Tribunal set aside the demands confirmed by the adjudicating authority and upheld the dropping of the demands vide the impugned order.
Background
Jharkhand State Cricket Association (‘appellant’) was a non-profitable, charitable institution engaged in promoting and controlling the cricket sport throughout the State of Jharkhand. It was established with the sole aim and objective of promoting, encouraging, organizing and controlling the game of cricket throughout the State of Jharkhand. The properties and management of the appellant was vested in the Board of Trustees / Committee of Management.
The appellant was a member of the Board of Control for Cricket in India (‘BCCI’). BCCI draws up its income and expenditure account annually and distributes a portion of the excess of income over expenditure, to its members in the form of subsidies/subvention, etc. Based on intelligence, it was alleged that the appellant was liable to pay Service Tax of Rs.21,63,19,261.11 on various income received by them. Further, upon adjudication, the adjudicating authority confirmed the Service Tax demand of Rs. 16,47,763 and dropped the demand of Rs.17,12,27,323.90.
The appellant submitted that they were challenging the demand confirmed in the impugned order only on grounds of limitation and not on merits. However, the Revenue filed an appeal challenging the same impugned order on dropping the demand. Since, the appeals emanated from the common impugned order, they were taken up together for adjudication.
Analysis, Law, and Decision
The Tribunal observed that the adjudicating authority had confirmed the demands under the following categories of services: (i) Selling of space or time for advertisement service; (ii) Franchisee service; (iii) Club or Association service; (iv) Maintenance and repair service. The Tribunal stated that in respect of the above demands confirmed in the impugned order, the appellant had contested demands only on the grounds of limitation and did not challenge the demand on merits.
The Tribunal observed that the demand was raised in the notice based on Annual Report for the year 2008-09 to 2013-14, which was published every year. When the demand was raised based on the books of accounts maintained by the appellant, extended period could not be invoked. Thus, the Tribunal held that the demands confirmed in the impugned order for the extended period of limitation was not sustainable. No penalty was imposable as suppression of fact with intention to evade the tax was not established in this case.
The Tribunal observed that all these activities undertaken by the appellant were for generating revenue with the aim of promoting the cricket. All these activities are undertaken during hosting the cricket matches alone and if there were no cricket matches played, then all these services become irrelevant. The Tribunal stated that the appellant earned money only when these services were provided during cricket matches. Thus, the Tribunal held that the appellant had rendered ‘bundled services’ in connection with promoting the game of cricket.
The Tribunal stated that since services rendered in promotion of sporting events was exempted from the levy of Service Tax prior to 30-06-2012, therefore, no service tax was payable by the appellant. Thus, the Tribunal held that the appellant was not liable to pay service tax for services rendered by them in connection with sports.
The Tribunal agreed with the dropping of demand raised under the category of ‘business auxiliary service’ as the said subsidies were not received for providing any service for the promotion, marketing or sale of any product or service for the “client”. The said “subsidies” were merely in the nature of grants-in-aid by the BCCI for promotion of the game of cricket in the State of Jharkhand. Further, the Tribunal also agreed with dropping the demand raised under the category of event management service by the adjudicating authority. Similarly, the Tribunal also agreed with the dropping of demands raised under the category of ‘mandap keeper service’, ‘renting of immovable property service’.
Thus, the Tribunal held that the demands had been rightly dropped by the adjudicating authority. However, the Tribunal set aside the demands confirmed by the adjudicating authority and upheld the dropping of the demands vide the impugned order.
[Jharkhand State Cricket Association v. CCE and Service Tax, 2024 SCC OnLine CESTAT 953, Decided on: 05-09-2024]
Advocates who appeared in this case:
For the Appellant: Kartik Kurmy, Advocate for the Assessee
For the Respondent: R.K. Agarwal, Authorized Representative for the Revenue
