2013 (9) TMI 429 - AT - Service Tax

Infrastructure and supporting services u/s 65 (105) (zzzq) r.w. 65 (104c) The assesse were an association for prompting the game of cricket - They had been getting some money every year from BCCI - Held that - Entire matter had been decided without taking on record the contract or the MoU between the two parties showing the terms and conditions of payments and the purpose of payment for each item - Neither the Show Cause Notice nor the reply to Show Cause Notice had brought this aspect in clear focus - As BCCI had been paying said amounts even prior to advent of IPL and had been also making payment to state associations which were not organizing IPL Demand was only in respect of additional amounts paid for IPL which fact needs verification. Waiver of pre deposit 50lakhs were ordered to be submitted on such submission rest of the amount to be waived till the final disposal decided in favor of assesse

Issues:
1. Classification of money received from the Board of Cricket Control of India (BCCI) by the State Cricket Associations.
2. Taxability of the money received by the State Cricket Associations for organizing Indian Premier League (IPL) matches.
3. Interpretation of the nature of payments received in relation to services rendered for IPL matches.
4. Consideration of payments made for maintaining infrastructure during the year 2009 IPL matches in South Africa.

Analysis:
1. The case involved a dispute regarding the classification of the money received by the State Cricket Associations from BCCI. The Revenue contended that the payments were for services rendered by the appellants for organizing IPL matches, while the appellants argued that the money was received for the development of cricket and support to retired players, not for taxable services.

2. The Revenue argued that the entire activity of organizing IPL matches was commercial, and the funds received were for services rendered in connection with IPL matches. They highlighted that the support of the Tamil Nadu Cricket Association was crucial for organizing IPL matches in Tamil Nadu, and the payments received were specifically for IPL matches, justifying the demand for service tax.

3. The appellants countered by pointing out that even in 2009 when IPL matches were held in South Africa, payments were received from BCCI, indicating that the payments were not linked to specific services related to IPL. They emphasized that the money received was for the development of cricket and supporting retired players, which should not be subject to taxation.

4. The Tribunal noted that the matter had been decided without considering the contract or Memorandum of Understanding (MoU) between the parties detailing the terms and conditions of payments. The Tribunal acknowledged arguments from both sides, highlighting that BCCI had been making payments even before the IPL era and to state associations not organizing IPL matches. The Tribunal called for a pre-deposit for admission of appeals to further verify the purpose of payments and stayed the collection of balance dues pending the appeal's disposal.

In conclusion, the judgment addressed the conflicting interpretations of the nature of payments received by the State Cricket Associations from BCCI, emphasizing the need for further verification of the purpose of payments and the terms outlined in the contract or MoU between the parties. The decision to call for a pre-deposit for admission of appeals reflected the Tribunal's intention to delve deeper into the specifics of the case before making a final determination on the taxability of the amounts received.

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