TaxTMI 
TaxTMI 
2023 (12) TMI 567
X X X X Extracts X X X X
X X X X Extracts X X X X
....'Twenty 20 Cricket competition'. The IPL was proposed to be a franchise-model where Corporate and Sponsors would be allowed to buy and run teams for conduct of cricket matches in IPL. Only the teams who have been permitted to operate as a 'Franchisee' can participate in the tournament and neither the State Team nor any Authorized Association (constituents of BCCI) can nominate their team for the IPL. Under this franchisee model, the sponsors / franchise units who have its team have to pay franchisee fee to BCCI/IPL to obtain the ownership of the team. Accordingly, a tender document called "Franchisee Tender Document" was made available inviting franchisees. M/s.ICL was one among the 8 franchisees finalized and they named their cricket team as 'Chennai Super Kings'. 3. After finalization of 8 franchisees in order to provide players for each franchisee, the BCCI collected a list of agreed contracted players, which included players of Indian origin and players of foreign origin. A base price was fixed for each of them and under the process of auction, each franchisee was allowed to bid for any player from the list. In addition to the contracted players, each franchisee was also all....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g with interest and imposed penalty under Section 76 (1) as well as Section 77 of the Finance Act, 1994. Aggrieved by such order, the appellant is now before the Tribunal. 7. The Learned Consultant Shri Joseph Dominic appeared and argued for the appellant. The agreement entered between the appellant and M/s.ICL was adverted to by the Ld. Counsel. It is submitted that this agreement of 2011 is a Tripartite agreement and is executed by the appellant, M/s.ICL as well as BCCI. Clause (1) of the agreement sets out the conditions wherein it is stated that the appellant is obliged to be physically and mentally capable of discharging his obligations. As per the agreement, the appellant has to submit himself for medical examination by a qualified doctor. Clause 2 of the agreement provides for the appointment / remuneration. It is stated in clause (2) that M/s.ICL has engaged the appellant as a professional cricketer who has an obligation to play and that M/s.ICL shall pay to the player, the Player Fee and other benefits set out in the agreement. Clause 3 of the agreement stipulates the obligations of Player in which it is stated that appellant has to report before M/s.ICl (franchisee) no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tionship, the activity does not fall under the category of any service. In the said case, the Tribunal had relied upon the decision passed by the Hon'ble High Court of Calcutta in the case of Sourav Ganguly Vs UOI - 2016 (43) STR 482 (Cal.). The Hon'ble High Court had set aside the demand observing that the agreement being in the nature of employer-employee relationship, the demand of service tax on the remuneration received by the players cannot be subject to levy of service tax. The said decision was appealed before the Division Bench of the Hon'ble High Court and the appeal was disposed of by reversing the view. 7.3 Later, in the case of Yusufkhan Pathan and Irfankhan Pathan vide Final Order No.A/10086-10087/2023 dt. 20.01.2023, the Tribunal analysed the issue whether the demand of service tax under 'Business Support Service' can be sustained on the payments received by players as per the agreements entered between players and the franchisee. The Tribunal observed that the agreements are in the nature of employment agreement and the amounts received are in the nature of remuneration for the work done by the employee and therefore cannot be subject to levy of service tax. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eared and argued for the Department. 8.1 It is submitted by the Ld. A.R that the intention of M/s.ICL in participating in the IPL is purely of commercial nature. It is to develop and improve their brand and brand image. M/s.ICL has obtained franchisee of 'Chennai Super Kings' for the promotion and development of their brand and brand image. The appellant by playing cricket for M/s.ICL, who is the franchisee for 'Chennai Super Kings', is doing brand promotion services of M/s.ICL. As per the erstwhile provisions of Section 65 (105) (zzzzq) as it stood prior to 1.7.2012, 'Taxable service' in relation to 'Brand Promotion reads as under : "any service provided or to be provided to any person by any other person, through a business entity or otherwise, under a contract or promotion or marketing of brand of goods services event or endorsement of name including a trade name, logo or house mark of a business entity by appearing in advertisement and promotional event or carrying out any promotional activity for such goods, service or event. Explanation. For the purpose of this sub-clause, "brand" includes symbol, monogram, label, signature or invented words which indicat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dia Cements Ltd. under the IPL Playing Contract entered by the appellant with M/s.ICL as well as the BCCI. To appreciate the facts, it would be necessary to bring out the relevant parts of the contract which are reproduced as under : "In consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties and IPL, it is agreed as follows: 1. Conditions 1.1 The obligations of the Parties under this Agreement (excluding this Clause 1 and subject as provided in Clause 1.0 are conditional upon the following : (a) the Player passing, if requested and to the Franchisee's reasonable satisfaction, an assessment that he is physically and / or mentally capable of discharging his obligations under this Agreement as the start of each Season (being 7 days before the start of the Leage). Any such assessment shall be performed by a qualified doctor appointed by the Franchisee and the Player agrees to the release to such doctor of any past medical, psychiatric and/or dental records in his possession or which he is entitled to access which are ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ss, in the latter case, (i) the Player is not selected for the Squad for such CLT 20l; or (ii) the Franchisee to its absolute discretion decides to release the Player to play for another team (not being a team in he League) which has qualified for any such CLT20; or (iii) the rules of the CLT20 (or any agreement to which the Franchisee has agreed) permit the Player to elect to play for another team (not being a team in the League) which has qualified for such CLT20 and the Player so elects; ... ... (l) if so requested by the Franchisee or IPL attend and give (a) press conference(s) or interview(s); (i) prior to any Match provided that the request is reasonable; (ii) after any Match; and (iii) at any other mutually agreed time ... ... 3.2 .. (c) without the Franchisee's prior written consent (not to be unreasonably withheld or delayed): (i) he accredited or act as a journalist or in any other capacity for any media organisation in India; (ii) provide exclusive interviews or commentaries or enter into any contractual arrangements or understandings as a result of which he agrees to provide e....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Existing Agreement prevent him from doing so, or (b) the provisions relating to the usage of the Player Identification contained in Any Central Contract prevent him from doing so in which case the Franchisee shall (to the exclusion of any other remedy) be entitled to 'reduce the Player Fee by 5% in respect of each such personal appearance. .. ... 5. Team Clothing 5.1 At all times when he is involved in any Team, Squad, League and/or Match related activities or engagements the Player shall : (a) wear and use only the Team Clothing authorised and/or supplied to him by the Franchisee; and (b) not display any badge, mark, logo, trading name or message on any item of clothing, equipment or footwear without the Franchisee's prior written consent. ... ... ... 8. Player Restrictions 8.1 Subject to any International Duty and t Clause 3.1 (i) as regards the CLT20 the Player shall not during any Season without the express prior written consent of the Franchisee: (a) play cricket or engage in any other sport or sporting activities for any other team, club or organisation whether in India or elsewhere....