2015 (3) TMI 434 - AT - Service Tax

Waiver of pre-deposit - event management service - whether M/s. Karnataka State Cricket Association (KSCA) has rendered event management service - service tax liability on club or association service - Held that - The way the consideration has been worked out on the ground that KSCA had rendered the service shows that all the income received in connection with the matches have been included and therefore we find considerable force in the submission of the learned counsel that what is being proposing to tax is the event and not the event management. In fact the learned counsel called the effort of the Revenue as an effort to collect cricket tax and not an event management fee. There is a contradiction in the ultimate finding and the proposal in the show-cause notice. What the show-cause notice proposed or concluded was that activity was undertaken on behalf of BCCI. How could a view that event management service has been provided by KSCA to BCCI can be taken is a question which would require much more detailed consideration. - On the one hand the Commissioner says that KSCA conducting the event and on the other hand the demand is confirmed under event management service. How the fans are related to the issue of event management and how does conducting events by the BCCI through the associations would amount to event management by the associations are not explained. The conclusions are contradictory to the findings above that the associations conduct the matches/events. We find ourselves in agreement with the submissions that there are contradictions between the observations of facts and the conclusions. Prima facie case is in favor of assessee - Stay granted.

Summary

Issues:
1. Whether the requirement of pre-deposit should be waived and stay granted.
2. Service tax demand on management and club/association services.
3. Consideration of submissions by the lower authority.
4. Tax liability on event management and club/association services.
5. Classification of bundled services and time-barred demand.
6. Arguments regarding cricket matches as events managed by the appellant.
7. Contradictions in the show-cause notice and ultimate findings.

Analysis:
1. The Tribunal deliberated on the issue of pre-deposit requirement and stay during the appeal. The focus was on determining if the demand of over &8377; 19 crore for service tax on management services and &8377; 2 crore for club/association services should be waived. The Tribunal decided to postpone detailed discussions on all issues and only considered essential details to decide on the pre-deposit requirement and stay.

2. The appellant contended that they had already paid a substantial amount, but their submissions were not considered by the lower authority. They also cited legal precedents where similar services were held not liable for service tax. The Tribunal noted penalties imposed under Sections 77 and 78 of the Finance Act and the appellant's grievances regarding non-consideration of crucial submissions.

3. Detailed submissions were made by the appellant regarding the tax liability on event management and club/association services. They argued against the classification of cricket activities as taxable events, emphasizing their unique position as a cricket governing body. The appellant raised concerns about the arbitrary nature of the adjudication process and the inclusion of irrelevant items in the taxable value.

4. The Tribunal analyzed the nature of the services provided by the appellant in relation to cricket matches. It was argued that the appellant's role was not that of an event manager but a cricket governing body affiliated with the BCCI. The Tribunal observed contradictions in the show-cause notice and the ultimate findings, questioning the basis for considering the appellant's activities as event management services.

5. The appellant highlighted errors in the classification of bundled services and argued that the demand was time-barred due to misinterpretation of their role as an event manager. The Tribunal considered the income heads and activities of the appellant to determine if the tax was levied on the event itself rather than on event management services.

6. The arguments presented by the Revenue focused on portraying cricket matches as events managed and organized by the appellant. However, the Tribunal scrutinized the actual responsibilities and activities of the appellant in conducting cricket matches, emphasizing the distinction between managing events and conducting cricket matches.

7. The Tribunal noted contradictions in the observations made in the show-cause notice and the Commissioner's conclusions. The lack of clarity regarding the appellant's role in providing event management services to BCCI raised doubts about the validity of the tax demand. Ultimately, the Tribunal found merit in the appellant's case for waiving the pre-deposit requirement and granting a stay against recovery during the appeal process.