Case Law Details

Case Name : Commissioner of Customs & Central Excise Vs. Shri. Swapnil Asnodkar (CESTAT Mumbai)
Appeal Number : Appeal No. ST/88043/13, ST/CO/91173/13
Date of Judgement/Order : 10/11/2017
Related Assessment Year :
Courts : All CESTAT (655) CESTAT Mumbai (129)

Commissioner of Customs & Central Excise Vs. Shri. Swapnil Asnodkar (CESTAT Mumbai)

Further as held by the Honorable High Court of Calcutta in case of Sourav Ganguly Vs. UOI [2016 (43) STR 482 (CAL)] that the services of brand promotion before 01.07.2010 are not taxable. Same views has been taken by the Tribunal in case of Commissioner of Service Tax Delhi Vs. Shriya Saran [2014 (36) STR 641 (TRI)]. We also find that as per the clause 4 and 4.8 of the agreement only 10% of the total sum receivable is towards Promotion of Brands of Goods, services and events and the remaining is towards match fees. The Brand promotion fee was not taxable until Negative list came into effect from 01.07.2010 and hence there cannot be any liability upon the Respondent till that period. Further from the agreement it is explicit that the fee towards brand promotion which falls under Business Auxiliary Service has remained below the exemption limit of Rs. 10 lakhs in respective years after 01.07.2010 and hence there is no liability upon Respondent to pay service tax.

FULL TEXT OF THE CESTAT ORDER IS AS FOLLOWS:-

The fact of the case is that the Respondent Swapnil Asnodkar is a Professional cricketer. He entered into contract with M/s Jaipur IPL Cricket P. Ltd. who are franchisee owners of Indian Premier League (IPL) team Rajasthan Royals. For the period 2008 2012 he received a sum of Rs. 1.12 crores for playing for Rajasthan Royals. The revenue sought to tax the said consideration under the category of  Business Auxiliary Services on the ground that the amount received by him is towards playing for IPL and for promotional activities. The show cause notice issued to the Respondent was set aside by the adjudicating authority. The appeal filed by the revenue before Commissioner (Appeals) was also rejected. Hence the revenue has filed the present appeal.

2. Shri B. Kumar Iyer, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterating the grounds of appeal submits that in terms of the agreement the Respondent granted the right to film etc. and use the players identification for promotion of the team, the franchisee IPL, the league and the Champion Tournament; also to assist maximization of promotional benefits to Franchisee and others and the consideration was received against said services. That the agreement stipulated 10 appearances by the player. The promotional activities in terms of agreement reveals the brand relating to goods and services. The services were provided for promoting of brands or goods, hence covered under business auxiliary services.

3. On the other hand, Shri Ashok Deshpande the Ld. Counsel appearing on behalf of the Respondent reiterates the finding of the impugned order. He submits that only 10% of the fee was towards promotion of brand and remaining 90% was towards match fee. He submits that the amount was not taxable in view of Calcutta High Court judgment in case of Sourav Ganguly Vs. UOI[ 2016 (43) STR 482 (CAL)] and Tribunal order in case of Commissioner of Service Tax Delhi Vs. Shriya Saran [2014 (36) STR 641 (TRI)]. That even the 10% amount of fee towards brand promotion has remained below the exemption limit in each year.

4. We have carefully considered the submission made by both sides. We find that though in the SCN the Respondent was made liable to pay service tax but as rightly held by the adjudicating authority, no specific clause of Section 65 (19) defining Business Auxiliary service has been shown to be applicable to levy service tax. It is not appearing from the show cause notice as to what goods or services the Respondent has promoted or helped to promote. The Appellate Commissioner also on the same ground has held that the demand being vague is not enforceable against the Respondent. We do not find any reason to infer any different view than expressed by the lower authorities as without specifying the activity and the nature of service of the Respondent he cannot be taxed. Further out of the seven clauses under Section 65 (19) no clause has been pointed out under which the Respondent is liable for service tax. Further as held by the Honorable High Court of Calcutta in case of Sourav Ganguly Vs. UOI [2016 (43) STR 482 (CAL)] that the services of brand promotion before 01.07.2010 are not taxable. Same views has been taken by the Tribunal in case of Commissioner of Service Tax Delhi Vs. Shriya Saran [2014 (36) STR 641 (TRI)]. We also find that as per the clause 4 and 4.8 of the agreement only 10% of the total sum receivable is towards Promotion of Brands of Goods, services and events and the remaining is towards match fees. The Brand promotion fee was not taxable until Negative list came into effect from 01.07.2010 and hence there cannot be any liability upon the Respondent till that period. Further from the agreement it is explicit that the fee towards brand promotion which falls under Business Auxiliary Service has remained below the exemption limit of Rs. 10 lakhs in respective years after 01.07.2010 and hence there is no liability upon Respondent to pay service tax.

5. In view of above observation, We are of the view that the Respondent is not liable to service tax and the revenues grounds of appeal are not acceptable. We therefore uphold the impugned order and dismiss the appeal filed by the revenue. CO stands disposed of.

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