Case Law Details
Gulf Oil Corporation Ltd Vs C.C.E. & S.T. (CESTAT Ahmedabad)
CESTAT find that the cenvat credit was denied to appellant on the ground that service being classifiable under Sponsorship Service, the appellant was supposed to discharge the service tax under GR-7 Challan. We find that the service provider M/s. K.P.H. Dream Cricket Pvt. Ltd. has classified the service under Business Auxiliary Service, in such case it is the service provider who is suppose to pay the service tax and the appellant can take the cenvat credit only on the basis of invoice issued by the service provider. The entire basis of the department’s case is dispute on the classification made by the service provider M/s. K.P.H. Dream Cricket Pvt. Ltd. We find that M/s. K.P.H. Dream Cricket Pvt. Ltd. has classified the service under Business Auxiliary Service and discharged the service tax and issued the invoice. Firstly, the classification of service cannot be disputed at the recipient end secondly, the classification of service maintained by the service provider M/s. K.P.H. Dream Cricket Pvt. Ltd. has been considered in judgment of COCA COLA INDIA PVT. LTD. reported at 2015 (38) STR 497.
From the above judgment, it can be seen that the only difference is that in the present case the cenvat credit was denied on the same ground on which the service tax was demanded in the above case. The dispute was same that the service falls under Sponsorship Service however, the tribunal in the case of COCA COLA INDIA PVT. LTD. (supra) held that at the recipient’s end the classification cannot be changed. Following the said judgment in the present case, we are of the considered view that since the classification of service cannot be challenged at the recipient’s end, the cenvat credit availed by them cannot be disputed.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The brief facts of the case are that during the course of audit conducted by the Central Excise Department, it was noticed by the audit party that the appellant has availed credit of Rs.1905500/- on the invoice issued by M/s. K.P.H. Dream Cricket Pvt. Ltd. (KPH) for promotion of the product of the appellant such as logo, trademark, products manufactured by the appellant. The service provider M/s. KPH has discharged the service tax and issued the invoice.
2. The case of the department is that the service is correctly classifiable under Sponsorship Service according to which the service recipient is required to pay the service tax in terms of Rule 2(1)(d)(iv) of Service Tax Rules, 1994 therefore, the service tax under the head of Business Auxiliary Service by the service provider is incorrect and consequentially the appellant is not entitled for the cenvat credit.
3. Shri Anandodaya Mishra, Learned counsel appearing on behalf of the appellant submits that since service provider has paid the service tax under Business Auxiliary Service and the same has not been challenged by the department neither classification can be disputed at the recipient end nor the cenvat can be denied on the charge that due to service classifiable under Sponsorship Service since the appellant is liable to pay the service tax, credit is not available. He placed reliance on the following judgments:
- IDEA CELLULAR LTD.- 2016 (8) TMI 1122- CESTAT MUMBAI
- M/s. PARASRAMPURIA SYNTHETICS LTD.- 2005 (191) ELT 899
- M/s. MAERSK INDIA PRIVATE LIMITED- 2008 TIOL 1477
4. Shri Prakash Kumar Singh, learned Superintendent (AR) appearing on behalf of the revenue reiterates the finding of the impugned order.
5. On careful consideration of the submission made by both the sides and perusal of records, we find that the cenvat credit was denied to appellant on the ground that service being classifiable under Sponsorship Service, the appellant was supposed to discharge the service tax under GR-7 Challan. We find that the service provider M/s. K.P.H. Dream Cricket Pvt. Ltd. has classified the service under Business Auxiliary Service, in such case it is the service provider who is suppose to pay the service tax and the appellant can take the cenvat credit only on the basis of invoice issued by the service provider. The entire basis of the department’s case is dispute on the classification made by the service provider M/s. K.P.H. Dream Cricket Pvt. Ltd. We find that M/s. K.P.H. Dream Cricket Pvt. Ltd. has classified the service under Business Auxiliary Service and discharged the service tax and issued the invoice. Firstly, the classification of service cannot be disputed at the recipient end secondly, the classification of service maintained by the service provider M/s. K.P.H. Dream Cricket Pvt. Ltd. has been considered in judgment of COCA COLA INDIA PVT. LTD. reported at 2015 (38) STR 497 which is reproduced below:-
After hearing both the sides, we find that the appellant entered into a contract with an agreement with KPH Dream Cricket Pvt. Ltd. for sponsoring the Cricket team Kings XI Punjab. On the said contractual consideration, a Service Tax of Rs. 37,08,000/- was collected by M/s. KPH from the present appellant and deposited with the Central Government under the category of Business Auxiliary Service. There is no dispute about above factual position.
2. However, subsequently Revenue entertained a view that the agreement between the appellant and M/s. KPH was falling under the category of sponsoring service and, as such, the tax liability fall on the appellant on reverse charge basis. Accordingly, proceedings were initiated against them for recovery of the said tax amount of Rs. 37,08,000/-. The said proceedings resulted in passing of an order by the original adjudicating authority confirming the tax liability along with interest and imposing penalties also. The order so passed, was upheld by Commissioner (Appeals), hence the present appeal.
3. For better appreciation, we reproduce the relevant paragraph from the impugned order of Commissioner (Appeals) :-
“5.3 Although the amount of Service Tax has been paid by the appellant and deposited by KPH under the taxable head „business auxiliary service‟. But in view of the instructions of C.B.E. & C. No. 42/Comm (S.T.), dated 8th February, 2008 sponsorship of a Cricket team may not be outside the scope of sponsorship service and Service Tax is required to be paid by the appellant. As the Service Tax is paid the Service Tax for their own tax liability the appellant is required to pay Service Tax on the services rendered by them under sponsorship service which is independent tax. Case laws cited by appellant 2010 (18) S.T.R. 803 (Com. A) and 2009 (13) S.T.R. 421 (Tri.-Ahmd.) does not support their case as in this case classification of services rendered has changed from business auxiliary services to independently classifiable services namely sponsorship service”.
4. As is seen from above, the payment of Service Tax in respect of the same service is not being disputed by the Revenue. However, their contention is that the sponsoring of the Cricket team amounts to providing sponsoring service and as such the liability would fall upon the appellant. Commissioner (Appeals) has also held that sponsoring of a Cricket team is not outside the scope of sponsorship service.
5. Apart from noting that the issue of sponsorship of Cricket has been held to be not covered by the sponsorship service, by the Tribunal in the case of Hero Motocorp Limited v. CST, Delhi reported in 2013 (32) S.T.R. 371 (Tri. – Del.), which would not cast any obligation on the appellant to discharge Service Tax, we also note that the Service Tax on the same transaction already stands deposited by M/s. KPH, under the category of Business Auxiliary Services. Demand of Service Tax in respect of the same transaction on the ground that the deposit of Service Tax was under a different category whereas a different category of service has been provided cannot be held to be justifiable.
6. In view of the foregoing, we set aside the impugned order and allow the appeal with consequential relief to the appellant.
From the above judgment, it can be seen that the only difference is that in the present case the cenvat credit was denied on the same ground on which the service tax was demanded in the above case. The dispute was same that the service falls under Sponsorship Service however, the tribunal in the case of COCA COLA INDIA PVT. LTD. (supra) held that at the recipient’s end the classification cannot be changed. Following the said judgment in the present case, we are of the considered view that since the classification of service cannot be challenged at the recipient’s end, the cenvat credit availed by them cannot be disputed.
6. Accordingly, the impugned order is set aside. Appeal is allowed.
(Pronounced in the open court on 07.02.2023)
