TaxTMI 
TaxTMI 
2020 (6) TMI 352
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....usand nine two only including education cess/SHEC 2 22,11,058 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 p....
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....0 days from the date of the communication of the order. then the penalty amount under Section 78 shall be reduced to 25% provided the reduced 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 ....
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.... 75,55,280 Rupees seventy five Iac fifty five thousand two hundred eighty 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 hereby order 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 var....
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.... four thousand two hundred nineteen only including cess/SHEC 3. 45,80,423 Rupees forty five Iac eighty thousand four hundred twenty three only including education cess/SHEC Total 1,10,28,163 Rupees one crore ten lac twenty eight thousand one sixty three only including education cess/SHEC upon M/s. International Merchandising Corporation under proviso to Section 73(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 t....
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....ould not have been invoked in the matter relating to interpretation of taxing statute as per the decisions in case of- ■ Indian Hotels Co Ltd [2014 (36) STR 1268 (T)] ■ Sharda Udyog [2015 (39) STR 1036 (T)] ■ Romson Juniors [2018-TIOL-507-CESTAT-All] ○ Once the show cause notice has been issued invoking extended period, show cause notice for the subsequent periods cannot be issued invoking extended period again as per decisions in case of- ■ 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)]: ➢ Deman....
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....roducer Services has been made in respect of "Other Broadcast Income" and "Footage Sale Income" reflected in their book of accounts. They were engaged in organizing sports event like "Chennai Open Tennis Tournament" and Fashion Events like "Lakme Fashion Week". The live feeds of these events were recorded and sold to various domestic and international TV Channels for broadcast, against agreed consideration. Hon'ble Tribunal has in following cases held that such a sale is of right to broadcast, is not a service but the activity of sale and service tax is not leviable: ○ BCCI [2007 (7) STR 384 (T)] ○ 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 [....
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....npower Recruitment and Supply Agency Service under Reverse Charge. ○ The agreements entered into by the appellants are with M/s First Serve Entertainment and M/s SFX Sports Group for supply of sports personalities and fashion personalities. ○ The agreements are not with any individuals for their participation in the events. ○ As per the agreements, FSE/ SFX is responsible for the participation of the personalities. ○ This shows that the manpower supplier is into the business of supply of persons at various events world over. ○ The participation or appearance of player in the instant case is similar to that of an employee who may be taken in for employment temporarily or otherwise 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 a....
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....STAT decision in Board of Control For Cricket in India Vs CST Mumbai-II reported as 2019(29) GSTL 304 (Tri Mum). ○ Reliance is also placed on Board of Control For Cricket in India Vs Commissioner reported as 2019 (21) GSTL J83 (Tri Mum) 4.1 We have considered the impugned order with submissions made in appeal, during the course of arguments and in written submissions. 4.2 We have framed following issues for consideration in this case: I. Demand of Service Tax- a. Manpower Recruitment and Supply Services (Reverse Charge) b. Intellectual Property Right Service (Reverse Charge) c. Management and Business Consultant Services (Reverse Charge) d. Programme Producer Services e. Sponsorship Services II. Limitation III. Natural Justice IV. Jurisdiction I. Demand of Service Tax 4.3 Appellants are engaged in organizing various sports and fashion events. 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 t....
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....ly agency's service [section 65(105)(k)] not between the individual and the person who uses the services of the individual. Such cases are covered within the scope of the definition of the taxable service [section 65(105)(k)] and, since they act as supply agency, they fall within the definition of "manpower recruitment or supply agency" [section 65(68)] and are liable to service tax. 4.5 In case of Safe & Sure Marine Services, [2013-TIOL-1741-CESTAT MUMBAI] Mumbai Bench of CESTAT held as follows: "5.3 In the present case, there are agreements entered into with the clients for recruitment and supply of manpower. We have perused these agreements. As per the agreement entered into with M/s ABG Shipping Ltd, vide agreement dated 1.4.2002, the responsibility of the appellant was for providing the necessary competent, certified and experienced personnel so as to ensure efficient running and maintenance of the vessel and the appellant, as Manning Contractor, agreed to provide to the owner 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 r....
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....tween Appellant and FSE are examined in terms of the definitions of Manpower Supply & Recruitment Agency Services as per Section 65 (105)(k) read with Section 65 (68) of Finance Act, 1994 and the clarification issued by the Board and above decision of Tribunal, we conclude that services provided by M/s FSE are squarely covered under this category. Vijay Amritraj is a separate and distinct legal person from FSE, in which he may be one of the Directors. FSE has entered into agreement with Appellants for causing the appearance and participation of Vijay Amritraj in a tournament organized by the appellant against payment of agreed consideration. Hence we have no doubt in holding that FSE was in the business of supplying recruiting and providing the players to the sport events organizers like appellant. Hence the services provided by such companies as FSE will be classified as Manpower Recruitment and Supply Agency Services as defined by the Finance Act at relevant times. Similarly position exists in respect 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 a....
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.... 4.9 Appellants in the present case undertook to register the trademark of their USA counterparts in India for organizing the event of Lakme Fashion Week. For registering they incurred certain expenses which were paid to them by the USA company. There was no transfer of the right temporarily, by the USA company, nor any permission was granted for use or enjoyment of any intellectual property. Nothing is forthcoming to show that there was such transfer or permission. Revenue has not been able to substantiate that the basis ingredients to hold that USA Company had provided any Intellectual Property Service as defined above to the appellant. Hence we are not in position to sustain the impugned order in respect of this demand. 4.10 Service Tax has been demanded in the category of Management and Business Consultant Services, in respect of certain usage charges paid by the Appellant's to their USA counterpart in respect of common software and SAP facilities created by them. Before addressing the issue in relation to the taxable category, the question which needs to be addressed is whether such payments made by the Appellant to their USA counterpart can be considered as payment towa....
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....xpenses are to be borne by the appellant and thereafter to be shared with other group companies. In such arrangement, we find no scope for tax liability on the part of the appellant under the category of BAS. We also note that the original order did not identify under which sub-clause of the tax entry BAS, the service tax is sought to be confirmed. 5. We note that the Hon'ble Supreme Court in Gujarat State Fertilizers and Chemicals Ltd. and Anr. Vs. CCE - 2016 -TIOL - 198 - SC - ST, examining a similar set of facts, held that sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement. The Tribunal in Old World Hospitality Limited vs. CST, New Delhi - 2017 - VIL - 97 - CESTAT - DEL - ST held as below :- "8. It is clear from the terms of the agreement that IHC and the appellants have undertaken the business activities together and shared the revenue in a fixed proportion. The obligation of each party has been listed out. The dealings are more like co-venture agreement with joint purpose and shared income. This is also emphasized by forming of committee for tariff and quality in which both the contracting parties a....
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....ploying the resources would be distributed to and borne by the Participating Group Companies by sharing of costs of arrangement". 7. Recently, in the case of Ruchi Strips & Alloys Ltd. vs. CCE, Indore vide final order No. 53506 of 2017 dated 19/05/2017, the Tribunal observed as below :- "6. Regarding a tax liability under "Business Auxiliary Services", I find that the appellant were getting certain considerations from their sister concern towards common pool expenses, dividend, refund of bond money etc. The appellant pleaded that there are common expenses for facilities like canteen, transportation within their group companies. There is no promotional activities involved in sharing the expenditure. I note that the impugned order simply recorded that all these services tantamount to provisions of services on behalf of the clients and accordingly, the appellants are liable to tax under "Business Auxiliary Services". It is not clear as to what type of service is being provided by the appellant and on whose behalf. There is no third party involved at all, in the whole transaction. Certain common expenditure towards various facilities like canteen, transportation, etc.....
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....rtising agency......" Since this decision is not in respect of the subject under consideration, the decision is distinguishable. 4.13 Issue under consideration was considered by Mumbai Bench of Tribunal in the case of Board of Cricket Control for India Vs Commissioner [2015 (37) ELT STR 785 (T-MUM)] holding that the activity of recording the live cricket match for providing feed to TV channels is activity covered under the taxable category of "Programme Producer Services" and will be subjected to Service Tax. This decision has been upheld by the Apex Court [2015 (37) STR J176 (SC)]. In the said decision Tribunal has held as follows: "6. We have carefully considered the submissions made by both the sides. We have also perused the contracts entered into with the service providers. 6.1 The agreement is titled as "Television production for international and domestic cricket". As per the recital in the contract entered into with M/s. Nimbus Sport International Pte. Ltd., the appellant has accepted the bid tendered by Nimbus Sport International Pte. Ltd. who has been referred to as 'the producer' in the agreement and has agreed to appoint the producer to produce a....
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....transmission of electro-magnetic waves through space or through cables intended to be received by the general public either directly or indirectly through the medium of relay stations; (86b) "programme producer" means any person who produces a programme on behalf of another person" From the reading of the contract, we find that the service provider has installed 30-32 cameras in the stadium to capture the images of the cricket match. The appellant has set up a broadcast control room (BCR) in the stadium where the match is played. The images taken by the cameras are transmitted to vision colour correction unit and the same are viewed by the experts and after processing, these images are transmitted to the director's vision desk. 6.4 The nature of activities undertaken by the service provider is as under :- "(i) The broadcast control room (BCR) is set up by the company in the stadium. It has various units, viz. vision colour correction unit, Director's vision desk, sound engineer desk, replay desk, graphic desk, hawk eye unit, ball speed machine, other machine routers, commentary unit, monitor wall. (ii) Around 30-32 cameras are fixed arou....
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....ds of comprehensiveness which might have both a direct significance as well as an indirect significance depending on the context". The Hon'ble Bombay High Court in the case of ONGC v. CCE, Raigad [2013 (32) S.T.R. 31 (Bom.)] has held that - "where the legislature or its delegate uses the expression "in or in relation to", its object and purpose is to widen the scope and purview of its entitlement". In other words, these are expressions of width and amplitude and cover within its scope any activity which is in connection with the main activity. In this view of the matter, the activities undertaken by the nonresident service providers squarely falls within the definition of "programme" as defined in Section 65(86a) and the service providers are 'programme producers' as defined in Section 65(86b). 6.6 As regards the contention that in respect of Hawkeye Innovations Ltd., they were only supplying software programmes for recording, this contention does not seem to be flowing from the contract entered into with Hawkeye Innovations Ltd. A perusal of the agreement with Hawkeye Innovations Ltd. shows that Hawkeye Innovations was required to supply four units in connection with the ....
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....mes they are read as vice versa to give effect to the manifest intention of the Legislature as disclosed from the context [Ishar Singh Bindra v. State of U.P. - AIR 1968 SC 1450+. In page 478 of the said book, it is stated that "in Section 2(1)(d)(i) of the Bombay Lotteries and Prize Competition Control and Tax Act, 1948, the Supreme Court read 'or' as 'and' to give effect to "the clear intention of the Legislature as expressed in the Act read as a whole" *State of Bombay v. RMD Chamarbaugwala - AIR 1957 SC 699+". Applying these .principles to the facts of the present case, to give effect to the manifest intention of the legislature, the expression "audio or visual matter" can be read as "audio and visual matter". Therefore, we do not find any merit in the contention raised in this regard by the appellant. 6.9 As regards the contention that since the programme is produced on behalf of BCCI, there should be a third person, which is lacking in the present case, this contention is also not tenable. The statutory definitions of 'programme' and 'programme producer services' do not envisage the presence of a third party. Whether the programme is produced for BCCI or on behalf of....
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.....15 The demand has been made in respect of the services classifiable under the category of "Sponsorship Services". This category of taxable service has been defined in the Finance Act,1994 as amended from time to time as follows: "Sponsorship" includes naming an event after the sponsor, displaying the sponsor's company logo or trading name, giving the sponsor exclusive or priority booking rights, sponsoring prizes or trophies for competition; but does not include any financial or other support in the form of donations or gifts, given by the donors subject to the condition that the service provider is under no obligation to provide anything in return to such donors. (Section 65 (99)(a) of Finance Act, 1994 as amended) "Taxable service" means any service provided or to be provided to any person, by any other person receiving sponsorship, in relation to such sponsorship, in any manner;" (Section 65(105) (zzzn) of Finance Act, 1994 as amended) 4.16 In the present case undisputedly Appellant have received certain amounts from sponsor's towards sponsoring the various events and matches organized by them. Appellants do not dispute that the services so provided by them fa....
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....clarification as above issued by the Joint Secretary (TRU). If the claims made are justified these amounts should be deducted from the taxable value. Since the Commissioner has failed to consider these submissions in the light of the above referred clarification issued by the Ministry, the matter needs to go back to the commissioner for consideration of these. 4.17 Appellants have submitted that demand in respect of the three taxable services received by them against foreign currency expenditure has been made collectively without specifying the quantum of expenditure that can be attributed to each of the services separately. We are in agreement with the submissions made by the Appellants, because as has been discussed in earlier paragraphs, we have upheld that on merits the demand is tenable in respect of one of the services and cannot be sustained in respect of the other two. How do we determine the portion of demand that is upheld. The approach of the Commissioner stating that since the rate of tax on the three services is the same so he can take the entire value of foreign currency expenditure together for determining the total demand is fallacious. Hence we are setting aside....
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....ow Cause Notice dated 23.04.2013 on the ground of jurisdiction. We find that this is not a show cause notice in terms of Section 73 (1) of the Finance Act, 1994, but is simply a statement of demand made in terms of Section 73 (1A). Section 73 (1A) inserted in Finance Act, 1994 by Finance Act, 2012 reads as follows: "(1A) Notwithstanding anything contained in sub-section (1) except the period of thirty months of serving the notice for recovery of service tax), the Central Excise Officer may serve, subsequent to any notice or notices served under that sub-section, a statement, containing the details of service tax not levied or paid or short levied or short paid or erroneously refunded for the subsequent period, on the person chargeable to service tax, then, service of such statement shall be deemed to be service of notice on such person, subject to the condition that the grounds relied upon for the subsequent period are same as are mentioned in the earlier notices." Thus in cases of statement of demands issued in terms of this sub section, the jurisdiction will immediately at the time of issuance itself be vested with the officer adjudicating the earlier show cause notic....