Customs, Excise and Services Tax Appellate Tribunal

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Division Coram of P. Anjani Kumar (Technical Member) and P. Dinesha (Judicial Member) allowed appeals against the order of First Appellate Authority which upheld the demand of service tax by the adjudicating authority.

Show cause notices were issued based on the agreement between players and franchisee and MOU between M/s. United Breweries Limited (UBL for short) and M/s. Royal Challengers Sports Private Limited (RCSPL for short), alleging thereby that the appellant had provided the services of promotion or marketing of goods/services by engaging himself in carrying advertising, promotional activity, team endorsement provided by M/s. RCSPL/franchisee/co-sponsors and hence, the same was taxable in terms of Section 65(105)(zzb) of the Finance Act, 1994. It was further proposed that the appellant had also provided the services under the category of “Business Auxiliary Service” as the services provided by the appellant were covered under (i) and (ii) to Section 65(19) of the 1994 Act. Thus, service tax was demanded for the period 2009-10 and 2008-09, apart from interest under Section 75 and penalties under Sections 76 and 77.

In the reply the appellant had denied of any liability however, the adjudicating authority chose to confirm the demand of service tax as well as interest and penalties. Appeal was made to the first appellate authority wherein the order of the adjudicating authority was upheld, thus the instant appeal was filed.

The Tribunal agreed with the contention of the senior advocate for the appellant that the issue was no more res integra as the very same issue was considered by the Kolkata Bench of the CESTAT in Sourav Ganguly v. Commissioner of Central Goods & Service Tax, Kolkata, 2020 SCC OnLine CESTAT 378 wherein, the issue has been decided in favour of a similarly placed taxpayer. The Kolkata Bench had taken into account the decision of Bombay High Court in the case of Indian National Shipowners’ Association v. Union of India, 2008 SCC Online Bom 1187 wherein it had been held that the activity of the appellant therein could not be subjected to levy of service tax under Business Auxiliary Service prior to July 1st, 2010.

The Tribunal finally relying on the order of the Kolkata Bench decision allowed the appeal and held that there is no liability on the appellant and hence, demands raised for both the periods cannot sustain.[Anil Kumble v. Commr. of Central Excise, Customs & Service Tax, 2022 SCC OnLine CESTAT 105, decided on 31-03-2022]

Mr. V. Raghuraman, Senior Advocate For the Appellants

Mr. P. Gopakumar, Additional Commissioner (AR)

Suchita Shukla, Editorial Assistant has reported this brief.

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