2017 (2) TMI 1152 - AT - Service Tax

Whether the sponsorship of the Indian Premier League would amount to the sponsorship of a sporting event for the period under dispute? - Held that - the said services get classified under the definition of sponsorship services on a finding that appellant is paying an amount to BCCI for being sponsorer of a team - It is a case of the appellant that Indian Premier League is sports event hence not taxable under sponsorship services. Whether the service tax amount received by the appellant from their other branches has been deposited by the appellant with the Government or otherwise? - Held that - the said provision will apply only in respect of the collection of any amount from the recipient of the taxable services in excess of the service tax assessed or determined and paid. It is undisputed in the case in hand that appellant had discharged the correct amount of service tax from place where they were supposed to discharge the service tax liability. Collection or otherwise of the service tax from their own circles cannot be equated to collection of service tax in excess of the amount paid or determined. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Taxability of sponsorship of Indian Premier League as a sporting event.
2. Collection and payment of service tax from appellant's other branches.

Analysis:

Issue 1: Taxability of IPL sponsorship
The appeal questioned whether sponsoring the Indian Premier League (IPL) constitutes sponsorship of a sporting event and if it is taxable under sponsorship services. The Tribunal referred to a previous case involving Hero Motocorp Ltd, where it was established that IPL is indeed a sporting event and not taxable under sponsorship services. This position was affirmed by the Supreme Court. As the matter was settled by the apex court, the Tribunal held that the original order classifying IPL sponsorship as taxable was not sustainable.

Issue 2: Collection and payment of service tax
The second issue revolved around the demand for the collection of service tax from appellant's branches in Kerala and Tamil Nadu. The adjudicating authority found that the appellant had charged and recovered service tax on debit notes raised for expenses incurred on behalf of these branches. However, the authority noted discrepancies in how the service tax was recorded in the appellant's books. The authority cited a case precedent to emphasize that the amount payable under Section 73A of the Finance Act, 1994 cannot be paid through the cenvat account but must be paid under GAR7 challan. The Tribunal concluded that the provisions of Section 73A only apply when collecting an amount in excess of the service tax assessed or determined and paid. Since the correct amount of service tax was already discharged by the appellant, the collection from their own branches did not constitute an excess collection. Therefore, the impugned order was set aside, and the appeal was allowed.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT MUMBAI highlights the key issues, legal interpretations, and conclusions reached by the Tribunal regarding the taxability of IPL sponsorship and the collection and payment of service tax from the appellant's branches.