2024 (2) TMI 1474 - AT - Service Tax

Service tax under the category of Business Auxiliary Service - appellant is a professional cricketeer - as alleged assessee had rendered promotional or marketing or sale of goods and services for the franchisee M/s. Royal Challengers Sports Pvt. Ltd. - HELD THAT - We find that the issue has been considered at length by the Tribunal in Sourav Ganguly s case 2020 (12) TMI 534 - CESTAT KOLKATA wherein held that the appellant had received the fees for playing cricket only and even otherwise it is a settled principle of law that if no machinery exists to exclude non-taxable service a composite contract is not taxable since law must provide a measure or value of the rate to be applied and any vagueness in the legislative scheme makes the levy fatal. The confirmation of demand under this head therefore cannot be sustained. The aforesaid observations of the Tribunal has subsequently been followed in the cases of Bharat Chipli and Anil Kumble 2022 (4) TMI 305 - CESTAT BANGALORE by this Tribunal. Thus demand dismissed.

Summary

Issues:
Whether the services rendered by the appellant fall under the category of 'Business Auxiliary Service'.

Analysis:
The appeal was filed against an order passed by the Commissioner of Service Tax, which confirmed demands for non-payment of service tax by the appellant for promotional activities related to a cricket franchise. The appellant, a professional cricketer, argued that he was not engaged in promotion or marketing of goods and services but was merely a player for the team. The appellant relied on precedents like Sourav Ganguly's case to support his argument that the services rendered should be classified as brand promotion rather than business auxiliary services.

The Tribunal examined the appellant's income details and responses to specific questions regarding the nature of services provided. The Tribunal noted that the appellant had received fees solely for playing cricket matches and had obtained service tax registration as a brand ambassador for promoting goods/services. The Tribunal emphasized the distinction between brand promotion and business support services, ultimately concluding that the confirmation of demand for service tax could not be sustained based on the vague legislative scheme and lack of clarity in the services provided by the appellant.

The Tribunal referred to previous judgments in cases involving other cricketers like Anil Kumble and Bharat Chipli, which supported the appellant's position. Based on consistent findings in similar cases, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief as per the law.

In conclusion, the Tribunal held that the services rendered by the appellant did not fall under the category of 'Business Auxiliary Service' but were more aligned with brand promotion activities. The decision was based on the specific nature of the appellant's contractual agreements and the lack of clarity in the legislative framework regarding the taxation of such services.