TaxTMI 
TaxTMI 
2023 (1) TMI 938
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....held to be liable to service tax under the service category of "Business Support 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....
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.... that playing cricket is the primary reason for which IPL was formed and promotional 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 ....
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....r considering the submission of both the parties and on perusal of the materials of records, we find that the show cause notice was issued proposing to demand service tax under "Business Support Services and both the adjudicating authority has confirmed the demand under the said 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 ....
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.... anything wrong with employer prescribing uniform code with his employee. Further, as seen from the clause 2 and clause 8.1(b) read with other clause of the agreement , there is no doubt that appellant has been appointed/ engaged by the respective Franchisee under the agreement of 'employment'. 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....
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....gued by the Ld. DR in paragraph-6 above of this order, cannot be made use to fit into another service ie., the categorization of the same set of activities under two different services for two different periods is not permissible. Having taxed under BSS, the Revenue should not have changed its stands for a different period when 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 th....
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....ver case has been set up by the department in the show cause notice fails and therefore the demand has to be set aside. In support of these submissions, he relied upon the following decisions:- • Swapnil Asnodkar vs. CCE, Goa - 2018-TIOL-92-CESTAT-MUM; • Warner Hindustan Ltd. vs. CCE, Hyderabad - 1999 (113) ELT 24; • CCE, Goa vs. R.K. Construction - 2016 (41) STR 879; • 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....
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....7. An identical matter titled as Sourav Ganguly v. UOI & Ors.; 2016(43) STR 482 (Cal.), has been decided by the Hon'ble Calcutta High Court in favour of cricketer. The Petitioner therein entered into an agreement with the franchisee under which he was obliged to participate in promotional activities apart from playing cricket for their franchisee and the department sought to tax the consideration received by the Petitioner from their franchisee under 'Business Support 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 peti....
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....e order. 69. "Further, find from the contract entered into by the petitioner with the IPL franchisee that the petitioner was engaged as a professional cricketer for which the franchisee was to provide fee to the petitioner. The petitioner was under full control of the franchisee and had to act in the manner instructed by the franchisee. The apparel that he had to wear was team clothing and the same could not exhibit any badge, logo, mark, trade name etc. The Petitioner was not providing any 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....
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....tends that the petitioner has been paid composite fee for playing matches and for participating in promotional activities but the component of promotional activities could not be segregated for charging service tax. Accordingly, service tax is chargeable on the composite amount. For this contention, the Department relied on the letter dated 26 July, 2010 issued by the Central Board of Excise and Customs which is also under challenge in this writ petition. In his order dated 12 November, 2012 the Respondent No. 3 has held that the petitioner 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 bra....