2014 (12) TMI 667 - AT - Service Tax

Sponsorship service - sponsor of the cricket team Kings XI Punjab - Held that - Payment of service tax in respect of the same service is not being disputed by the Revenue in precedent case. However, their contention is that the sponsoring of the cricket team amounts to providing sponsoring service and as such the liability would fall upon the appellant. Commissioner (Appeals) has also held that sponsoring of a cricket team is not outside the scope of sponsorship service. Apart from noting that the issue of sponsorship of cricket has been held to be not covered by the sponsorship service, by the Tribunal in the case of Hero Motocorp Limited vs. CST, Delhi reported in 2013 (6) TMI 447 - CESTAT NEW DELHI , which would not cast any obligation on the appellant to discharge service tax, we also note that the service tax on the same transaction already stands deposited by M/s KPH, under the category of Business Auxiliary Services. Demand of service tax in respect of the same transaction on the ground that the deposit of service tax was under a different category whereas a different category of service has been provided cannot be held to be justifiable. - Decided in favour of assessee.

Summary

Issues:
1. Whether the appellant is liable to pay service tax on sponsoring a cricket team under reverse charge basis.
2. Validity of the order passed by the original Adjudicating Authority confirming the tax liability, interest, and penalties.
3. Interpretation of the scope of sponsorship service in relation to sponsoring a cricket team.
4. Applicability of case laws in determining the classification of services rendered.

Analysis:
1. The appellant had entered into a contract with KPH Dream Cricket Pvt. Ltd. for sponsoring the cricket team Kings XI Punjab, resulting in a service tax of Rs. 37,08,000 being collected by KPH and deposited with the Central Government under Business Auxiliary Service. Subsequently, the Revenue contended that the agreement fell under sponsoring service, shifting the tax liability to the appellant on a reverse charge basis.

2. The original Adjudicating Authority confirmed the tax liability, interest, and penalties, which was upheld by the Commissioner (Appeals), leading to the present appeal challenging the order. The Commissioner (Appeals) referred to CBEC instructions and held that sponsoring a cricket team may fall under sponsorship service, necessitating the appellant to pay service tax independently.

3. The Tribunal noted that sponsoring a cricket team was not outside the scope of sponsorship service, citing a previous case involving Hero Motocorp Limited vs. CST, Delhi. The Tribunal emphasized that the service tax for the same transaction had already been deposited by KPH under Business Auxiliary Services, making the demand for service tax under a different category unjustifiable.

4. The Tribunal, in its judgment delivered by Ms. Archana Wadhwa, set aside the impugned order, allowing the appeal with consequential relief to the appellant. The decision was based on the finding that the sponsoring of a cricket team did not constitute a separate taxable service warranting additional service tax liability on the appellant, especially when the tax for the same transaction had already been paid under a different category.