2014 (10) TMI 345 - AT - Service Tax

Waiver of pre deposit - Business Auxiliary Service - Agreement for playing matches for Royal Challengers Bangalore in IPL - Held that - Payment of USD 50, 000 is for playing 20 matches and if the player deliberately absents himself or does not give a proper reason for not playing the amount will be deducted proportionately. The amount payable directly relates to number of matches played. Prima facie it appears that amount paid is mainly for playing cricket and the amount is based on number of matches. The dominant intention of both the parties in the agreement appears to be that the player has to play cricket and wear the logo and other things but the main objection of agreement is to ensure that the appellant played as per the requirement of franchisees. At this stage in our opinion appellant has made out a prima facie case in his favour and accordingly there shall be waiver of pre-deposit and stay against recovery during the pendency of appeal - Stay granted.

Summary

Issues:
1. Whether the appellant's activity constitutes 'Business Auxiliary Service' for which payment was received.
2. Whether the appellant's payment was primarily for playing cricket matches or for other services rendered.

Analysis:
1. The issue before the Appellate Tribunal was whether the appellant, a cricket player, should be treated as a service provider under 'Business Auxiliary Service' for the payment received from playing in the IPL season. The Revenue contended that the appellant's obligations, such as wearing the team's logo and uniform, constituted 'Business Auxiliary Service.' However, the Tribunal analyzed the contract and found that the payment of USD 50,000 was directly related to playing 20 matches, with deductions for absences without proper reasons. The Tribunal observed that the amount paid was predominantly for playing cricket, as it was based on the number of matches played. It was noted that the main intention of the agreement was to ensure the player's participation as required by the franchise, indicating a prima facie case in favor of the appellant.

2. The Tribunal's analysis focused on the dominant intention of the agreement between the appellant and the team, emphasizing that the payment was essentially for playing cricket matches. While the appellant was required to fulfill certain obligations like wearing the team's logo, the Tribunal highlighted that the core purpose was the player's on-field performance. The Tribunal concluded that the appellant had established a prima facie case in his favor, leading to a decision to waive the pre-deposit and grant a stay against recovery during the appeal's pendency. This decision was based on the Tribunal's interpretation of the contractual terms and the primary nature of the payment in relation to playing cricket matches, distinguishing it from 'Business Auxiliary Service.'

This detailed analysis of the issues involved in the judgment showcases the Tribunal's interpretation of the contractual terms and the predominant purpose of the payment received by the appellant for playing cricket matches, ultimately leading to a favorable decision in the appellant's favor.