Service tax in respect of same transaction cannot be demanded again for payment under different category

Service tax in respect of same transaction cannot be demanded again on ground that deposit of Service tax was under different category whereas different category of service has been provided

Coca Cola India Pvt. Ltd.(the Appellant) entered into an Agreement with KPH Dream Cricket Pvt. Ltd. (KPH) for sponsoring the cricket team Kings XI Punjab. On the said contractual consideration, a Service tax of Rs. 37,08,000/- was collected by KPH from the Appellant, which was deposited with the Central Government under the category of Business Auxiliary Service (BAS).

Later on, the Revenue entertained a view that the Agreement between the Appellant and KPH was falling under the category of ‘Sponsorship Service’ and, as such, the tax liability falls on the Appellant under reverse charge mechanism.

Notwithstanding that Service tax already stood paid by KPH, proceedings were initiated against the Appellant for recovery of the said tax amount of Rs.37,08,000/- which was further affirmed by the Adjudicating Authority, confirming the demand with interest and penalty.

Being aggrieved, the Appellant preferred an appeal before the Hon’ble Commissioner (Appeals). The Hon’ble Commissioner (Appeals) also found the decision of the Adjudicating Authority proper &legal and accordingly dismissed the appeal filed by the Appellant.It was held by the Commissioner (Appeals) that such liability would fall upon the Appellant and sponsoring of a cricket teamis not outside the scope of sponsorship service.Thereafter, the Appellant filed an appeal before the Hon’ble CESTAT, Delhi.

The Hon’ble CESTAT, Delhi relying upon the decision in the case of Hero Motocorp Limited Vs. CST, Delhi [2013-TIOL-873-CESTAT-DEL]held that the demand of Service tax in respect of the same transaction on which Service tax had already been deposited, 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.

Accordingly, the order of the Adjudicating Authority was set aside and the appeal was allowed with consequential relief.