2018 (2) TMI 136 - AT - Central Excise

Scope of SCN - change in classification - Held that - the SCN was issued proposing to demand service tax under business support service and the original authority has confirmed the demand under the said category whereas at the appellate stage, the Commissioner (appeals) has changed the classification from business support service to brand promotion service suo motu and unilaterally which is not permitted under law - the impugned order passed by the Commissioner (Appeals) going beyond the SCN is not sustainable in law. Appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
Classification of services rendered by the appellant-assessee under Section 65(105)(zzzzq) of the Finance Act, 1994 vs. support services of 'business or commerce'.

Analysis:
The appellant-assessee appealed against the order passed by the Commissioner (Appeals) changing the classification of services rendered by the appellant to promoting a brand of goods, services, events, business entity under Section 65(105)(zzzzq) of the Finance Act, 1994. The Revenue also filed an appeal against the same order, arguing that the services should be classified as support services of 'business and commerce'. The appellant, a cricketer playing for the Indian National Cricket Team, entered into an agreement with a franchisee, GMR Sports Pvt. Ltd., to play cricket matches. The Revenue alleged that the appellant was providing business support services to GMR, leading to a demand for service tax. The Additional Commissioner confirmed the demand, and the Commissioner (Appeals) upheld this decision, prompting the appellant's appeal.

The appellant's counsel argued that the impugned order was unsustainable as it did not consider all submissions, was contrary to binding precedent, and violated principles of natural justice. He contended that the Commissioner (Appeals) wrongly classified the services under brand promotion service, which was not the department's case. The department's appeal also highlighted that the Commissioner (Appeals) cannot change the classification of services at the appellate stage. The Tribunal, after considering both parties' submissions and relevant case law, found that the Commissioner (Appeals) had erred in changing the classification from business support service to brand promotion service unilaterally. The Tribunal held that this action was not permitted under the law and set aside the impugned order, allowing the appellant's appeal. The Tribunal also noted that the department's appeal lacked merit in light of the decisions cited by the appellant-assessee.

In conclusion, the Tribunal allowed the appellant's appeal, setting aside the impugned order, and dismissed the Revenue's appeal. The judgment was pronounced in open court on 31.1.2018.