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TMI Blog2022 (12) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... employer-employee relationship exists between the agency and the individual and not between the individual and the person who uses the services of the individual. Such cases were held to be governed by the definition of manpower recruitment or supply agency in Section 65(68) and hence liable to service tax. The CBEC circular dated 23 August 2007 deals with a situation where there exists a relationship of employer and employee between the agency which supplies the service and a person whose service is supplied. But it does not postulate that such a relationship must exist for the statutory definition to be attracted. Hence, the fact that there may be no relationship of employment between VA and FSE would not be dispositive for the purposes of the statutory definition in Section 65(68). For the above reasons, we are of the view that the decision of the Tribunal on this aspect of the matter cannot be faulted with. Programme produce - The Tribunal relied upon its decision in the case of Board of Control for Cricket in India 2014 (9) TMI 598 - CESTAT MUMBAI] - in terms of the contract, BCCI had appointed the producer to exclusively produce the feed for and on behalf of BCCI fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us agreements, both domestic and international, with regard to the hiring of celebrities for appearances at the events, selling broadcasting rights, sharing IT services with group companies abroad, and secondment with group companies. 3. The Appellant entered into an agreement on 1 January 2005 with an entity by the name of First Serve Entertainment [FSE] for the appearance of Mr. Vijay Amritraj [VA], a noted tennis player, in connection with the Chennai Open Tennis Tournament. On 3 January 2005, the Appellant entered into an agreement with a tennis player of Thai origin, Mr. Paradorn Srichaphan, for his participation in the same tournament. 4. The contents of the agreement with FSE for appearance and participation of VA are extracted below: 2. Appearance and Participation, IMC hereby engages First serve for appearance and participation of Amritraj of First Serve in connection with Chennai open. Amritraj will appear and participate in the opening and closing ceremonies and also play in the charity auction match at the Chennai open [and] First Serve hereby accepts such engagement and agrees to cause Amritraj to appear and participate in the Chennai open in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed herein. B. Rights and Definitions: The following rights and terms shall be defined as set forth below for the purposes of this Agreement: Designated Rights Cable, satellite and terrestrial television Licensed Period From the date of commencement of the Event held in 2007 till the conclusion of the Event held in 2009 Licensed Territory India Licensed Language English and Hindi The above Rights with regards to the Event, whose Programmes shall be produced and supplied by Licensor and which are granted to Licensee in the Licensed Language on an exclusive basis in the Licensed Territory.' (emphasis supplied) 6. The Appellant entered into an agreement with Trans World International on 16 September 2010 for the sale of telecast rights of the Chennai Open Tennis Tournament in territories outside India. The relevant extracts of the agreement between the Appellant and Trans World International are as follows: WHEREAS A) IMC owns the rights to organize, promote and conduct a men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal. The Tribunal by its judgment dated 29 May 2020 held against the Appellant. It observed that the services provided by FSE were in the nature of supplying, recruiting, and providing players for sport events organized by the Appellant. It held that such services will be covered under the definition of manpower recruitment or supply agency Under Section 65(105)(k) read with Section 65(68) of the Finance Act, 1994. The Tribunal further relied upon the decision in Board of Cricket Control for India v. Commissioner 2015 (37) ELT STR 785 (T-MUM) to uphold the order of the Commissioner imposing the demand of service tax under the category of programme producer services during the relevant period. The Tribunal did not accept the argument of the Appellant that the Commissioner could not have invoked the extended period of limitation as the issues involved interpretation of legal provisions. On the issue of imposition of penalty on the Appellant, the Tribunal directed the Commissioner to redetermine the amount of penalty in remand proceedings. 10. Mr. S. Ganesh, Senior Counsel appearing on behalf of the Appellant submits that: (i) The Appellant identified VA for his participati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms governing the definition in Section 65(68) by reference to the circular of the CBEC when the circular has been issued in a completely different context. 12. In the counter-affidavit filed by the Respondent, it has been averred that the agreement between the Appellant and FSE indicates that the latter has caused the participation of VA in terms of the requirement of the Appellant. Therefore, the said activity was specifically covered under manpower recruitment or supply agency as defined Under Section 65(68) read with Section 65(105)(k). As regards the demand of service tax on programme producer services, the Respondent averred that production of programmes for telecast on TV channels falls under the category of program producer services and was taxable. 13. The first issue which falls for determination bears upon the interpretation of the provisions of Section 65(68) read with Section 65(105)(k) of the Finance Act 1994. The definitions of manpower recruitment or supply agency and taxable service Under Section 65 of the Finance Act, 1994 are as follows: 65. Definitions - In this Chapter, unless the context otherwise requires,- *** (68) manpower recruitment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ganesh, Senior Counsel for the Appellant is that the CBEC having issued a circular dated 23 August 2007, the excise authorities would be bound by the circular which has the effect of narrowing the ambit of the statutory definition contained in Section 65(68). There can be no doubt as a matter of first principle that the revenue is bound by its own circulars. Equally, it is necessary to understand the context in which the circular dated 23 August 2007 was issued by the CBEC. The circular narrates that after the introduction of service tax in 1994, several clarifications in the form of circulars, instructions and letters were issued by the CBEC and the Directorate General Service Tax. The Union Government decided to undertake a comprehensive review of all the clarifications having due regard to the changes which have been brought about by statutory provisions and judicial pronouncements. A Committee was constituted for that purpose which invited the opinions of all stake holders. Following the report of the Committee, the Union government issued the circular so as to reflect the interpretation of the law and the current practice of the department. Yet, paragraph 8 of the circular cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The agency agrees with another person to supply the services of that individual employed by the agency for a consideration. An employer-employee relationship exists between the agency and the individual and not between the individual and the person who uses the services of the individual. Such cases were held to be governed by the definition of manpower recruitment or supply agency in Section 65(68) and hence liable to service tax. The CBEC circular dated 23 August 2007 deals with a situation where there exists a relationship of employer and employee between the agency which supplies the service and a person whose service is supplied. But it does not postulate that such a relationship must exist for the statutory definition to be attracted. Hence, the fact that there may be no relationship of employment between VA and FSE would not be dispositive for the purposes of the statutory definition in Section 65(68). For the above reasons, we are of the view that the decision of the Tribunal on this aspect of the matter cannot be faulted with. 18. The second submission which has been urged on behalf of the Appellant by Mr. S. Ganesh, Senior Counsel relates to the definition of the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in Sub-clauses (a) to (g) thereof. Clause 4 of the agreement deals with the other obligations of the producer and Clause 5 deals with personnel who should be engaged for production. Clause 6 deals with production and technical specifications relating to the equipment, use of the equipment, camera and key camera positions and so on. Clause 9 deals with assignment of the copyright by the producer to BCCI in respect of all the sound recordings, broadcasting and transmissions and so on. For the services rendered, Clause 10 of the agreement specifies the consideration to be paid by BCCI to the producer for the production of the feed which includes all statutory taxes and charges, import duties and tariffs on imported materials and equipment, rise and fall, relevant award costs and allowances for the personnel.' (emphasis supplied) 21. The above extract indicates that in terms of the contract, BCCI had appointed the producer to exclusively produce the feed for and on behalf of BCCI for each match. This is the distinguishable feature of the decision of the Tribunal in BCCI which is absent in the present case. Therefore, we are of the considered view that the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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