2024 (11) TMI 1346 - AT - Service Tax

Demand of Service Tax and imposition of penalties - appellant conducts Cricket Matches in International Level, National Level and State Level at different places in Vadodara region - service provider/service receiver relationship between the appellant and BCCI for the purpose of levying service tax appellant was receiving subsidies/assistance from BCCI from time to time. The appellant had also received certain capital equipment from BCCI. Under the mistaken belief that the capital equipment is additional subsidy/assistance from BCCI, the appellant paid service tax thereon. Later on, the BCCI informed that them the said capital received is part of the total subsidies/assistance from BCCI and not in addition to it. The appellant had also paid the service tax on total subsidy . Later on BCCI raised debit note on the appellant. In respect of the value of the goods supplied as capital equipment. Consequently, the appellant took suo moto re-credit of the service tax paid on the capital equipment HELD THAT - The appellant had received certain equipment from BCCI and under the impression that the said equipment is in addition to the grant given by the BCCI, the appellant discharged service tax thereon. Later on, when debit note was raised by the BCCI, the appellant released that the equipment received was part of the grant and not in addition to it and consequentially corrected the situation by taking re-credit of the service tax paid on capital equipment. Similar facts are mentioned in the statement of the Head of Account of BCCI. In the said statement against question No. 8, 9 and 10, Shri Vidyadhar Laxman Sahasrabudhe has observed that BCCI has debited an amount of Rs. 4.14 Crore from the account of BCA maintained by them by way of issuing debit note dated 31.03.2014. Shri Vidyadhar Laxman Sahasrabudhe also submitted the relevant ledgers for 2013-14. In similar circumstances in the case of Saurashtra Cricket Association 2022 (11) TMI 152 - CESTAT AHMEDABAD the tribunal had relied on the observations made by Tribunal in the case of Vidarbha Cricket Associate 2014 (1) TMI 204 - CESTAT MUMBAI (LB) to allow the benefit. The decision of Tribunal in the case of Saurashtra Cricket Association 2022 (11) TMI 152 - CESTAT AHMEDABAD has been upheld by the Hon ble Apex Court as reported 2023 (5) TMI 814 - SC ORDER . Appeal allowed.

Summary

Issues Involved:

1. Whether there is a service provider/service receiver relationship between the appellant and BCCI for the purpose of levying service tax.
2. Whether the appellant correctly adjusted the excess payment of service tax under Rule 6(3) and Rule 6(4A) of the Service Tax Rules, 1994.
3. Applicability of extended period of limitation for issuing the show cause notice.

Issue-wise Detailed Analysis:

1. Service Provider/Service Receiver Relationship:

The primary issue revolved around whether the appellant, a cricket association, had a service provider/service receiver relationship with the Board of Control for Cricket in India (BCCI) that would necessitate the payment of service tax. The appellant argued that the subsidies and assistance received from BCCI, including capital equipment, did not constitute consideration for any service rendered. The appellant relied on a decision by the Learned Commissioner Rajkot and subsequent tribunal decisions, which held that there was no such relationship. The tribunal upheld these views, referencing the Hon'ble Apex Court's decision that amounts received by cricket associations from BCCI for participating or hosting tournaments are not subject to service tax. The tribunal concluded that since the equipment received from BCCI was part of the total subsidies and not additional, no service tax was due, and thus, the demand should be dropped.

2. Adjustment of Excess Payment of Service Tax:

The appellant had initially paid service tax on the capital equipment received from BCCI, under the mistaken belief that it was additional assistance. Upon realizing the error, the appellant took suo moto re-credit of the service tax paid. The tribunal analyzed whether this adjustment was permissible under Rule 6(3) and Rule 6(4A) of the Service Tax Rules, 1994, which allow for the adjustment of excess service tax paid. The tribunal found that the appellant had appropriately adjusted the excess payment as credit, supported by relevant case law and a Chartered Accountant's certificate. The tribunal concluded that the appellant's actions were in accordance with the rules, and the re-credit was justified.

3. Extended Period of Limitation:

The tribunal considered whether the extended period of limitation was applicable for issuing the show cause notice dated November 15, 2017, concerning re-credit taken in January 2015. The appellant contended that there was no fraud, suppression, or willful misstatement involved, which are prerequisites for invoking the extended period. The tribunal agreed with the appellant, noting that the facts were not in dispute and there was no evidence of any intent to evade tax. Consequently, the invocation of the extended period was deemed inappropriate.

Conclusion:

The tribunal found no merit in the impugned order demanding service tax and penalties from the appellant. It was determined that the appellant was not liable for service tax on the subsidies and assistance received from BCCI, as there was no service provider/service receiver relationship. The tribunal also upheld the appellant's adjustment of excess service tax paid and ruled against the applicability of the extended period of limitation. The appeal was allowed, and the order was set aside.