2016 (8) TMI 90 - AT - Service Tax

Waiver of pre-deposit of demand of service tax - Business Support Service under franchise agreement with BCCI-IPL. - Central Right Income and various other activities - Held that - rima face we find that the demand is not sustainable under Business Support Service under franchise agreement with BCCI-IPL. Therefore, waiver of pre-deposit of the demand of service tax of ₹ 8,23,55,893/- is granted during the pendency of the appeal. With regard to the payment made to the players in the applicant s own case for the earlier period, this Tribunal has directed to pay service tax of 10% the demand on account of the payment pertaining to the business promotional activity. In that circumstance, we direct the applicant to make pre-deposit of ₹ 11.50 lakh at this stage. On such deposit the balance amount of service tax under this head is waived off during the pendency of the appeal. The applicant has paid player release fee to the Cricket Board South Africa and Cricket Board Australia for playing the cricket in IPL on behalf of the applicant. The demand has been confirmed under the category of Manpower Recruitment or Supply Agency Service. As discussed in the preceding paragraph, the applicant is not a Manpower Recruitment or Supply Agency and under this head, service tax is not leviable. Therefore, prima facie, we waive the requirement of pre-deposit of ₹ 10,47,356/- during the pendency of the appeal. Stay granted partly.

Summary

Issues:
1. Waiver of pre-deposit of demand of service tax.
2. Classification of activities under different categories for service tax.
3. Applicability of service tax on various transactions related to cricket tournament activities.

Analysis:

Issue 1: Waiver of pre-deposit of demand of service tax
The applicant sought waiver of pre-deposit of service tax demand amounting to ?10,44,02,493 along with interest and penalties. The Tribunal examined the details of the demand and considered the arguments presented by both parties. The Tribunal granted waiver of pre-deposit for certain amounts based on the nature of the transactions and agreements involved.

Issue 2: Classification of activities under different categories for service tax
The Revenue classified various activities such as Central Rights Income, Players' fees, Players' transfer fees, Player release fees, and gate receipts under different service categories like Business Support Service and Manpower Recruitment Agency Service. The Tribunal analyzed the nature of these activities in relation to the agreements and transactions between the parties. It considered legal definitions and precedents to determine whether the activities qualified for the respective service tax categories.

Issue 3: Applicability of service tax on various transactions related to cricket tournament activities
The Tribunal examined the specific transactions related to the cricket tournament activities of the applicant, who was a franchise of BCCI-IPL T-20 Cricket tournament. It reviewed the agreements, payments, and nature of services provided by the applicant in the context of service tax liability. The Tribunal considered past judgments and legal provisions to determine the applicability of service tax on the transactions involving players' fees, transfer fees, and gate receipts.

In conclusion, the Tribunal granted partial waiver of pre-deposit based on its findings regarding the classification of activities and applicability of service tax. The decision was made after a thorough analysis of the agreements, transactions, legal definitions, and past judgments related to the case.