2022 (4) TMI 305 - AT - Service Tax

Levy of Service Tax - Business Auxiliary Services or not - 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 - HELD THAT - The issue is no more res integra as the very same issue was considered by the learned Kolkata Bench of the CESTAT in the case of SOURAV GANGULY VERSUS COMMISSIONER OF SERVICE TAX, KOLKATA (NOW COMMISSIONER OF CENTRAL GOODS SERVICE TAX CENTRAL EXCISE, KOLKATA SOUTH) 2020 (12) TMI 534 - CESTAT KOLKATA wherein, the issue has been decided in favour of a similarly placed taxpayer. The learned Kolkata Bench has elaborately considered the relevant provisions as well as orders of various Benches of CESTAT and also that of the decision of the Hon ble Bombay High Court in the case of INDIAN NATIONAL SHIPOWNERS' ASSOCIATION VERSUS UNION OF INDIA 2009 (3) TMI 29 - BOMBAY HIGH COURT wherein it has 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. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Taxability of services provided by the appellant for promotion and marketing of goods/services.
2. Applicability of Section 65(105)(zzb) of the Finance Act, 1994.
3. Demand of service tax, interest, and penalties for the periods 2008-09 and 2009-10.
4. Adjudication of the demand by the First Appellate Authority.

Analysis:

1. The show-cause notices were issued based on agreements between players, franchisee, and MOU between two entities, alleging that the appellant provided services of promotion or marketing of goods/services, making it taxable under Section 65(105)(zzb) of the Finance Act, 1994. Additionally, the services were categorized under "Business Auxiliary Service," leading to a proposed demand of service tax for the periods 2008-09 and 2009-10, along with interest and penalties under relevant sections.

2. The appellant contested the liability proposed, but the adjudicating authority confirmed the demand in Orders-in-Original. Subsequently, the First Appellate Authority upheld the demand in Orders-in-Appeal, leading the appellant to appeal before the forum. During the hearing, the learned Senior Advocate for the appellant and the Additional Commissioner for the Revenue presented their arguments.

3. The Tribunal acknowledged that a similar issue had been considered by the Kolkata Bench of the CESTAT in a previous case, where it was decided in favor of a taxpayer in a similar position. The Kolkata Bench extensively analyzed relevant provisions, decisions of various CESTAT Benches, and a judgment of the Bombay High Court. Referring to this precedent, the Tribunal concluded that there was no liability on the appellant, and therefore, the demands for both periods were unsustainable.

4. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential benefits as per the law. The judgment was pronounced in Open Court on 31/03/2022 by the members of the Tribunal.