By TIOL News Service

MUMBAI, MAY 30, 2013: THE appellant is a member of the Board of Control for Cricket in India (BCCI). From the income proceeds of BCCI, the members were given reimbursement under various categories such as, TV Rights subsidy, Tournament receipts, IPL subsidy players' expenses reimbursements and subsidy for international matches. These amounts are given to promote the game of cricket and also to undertake construction of infrastructure for playing cricket within the jurisdiction of the members.

The CCE & ST, Nagpur was of the view that the amounts received from BCCI by the appellant is for providing infrastructure support to BCCI for conducting tournaments and, therefore, the same is classifiable under the category of ‘Business Support Services'.

A Service Tax demand of more than Rs.21 crores was raised under two SCNs on the consideration received by the appellant during the period 2006-07 to 2009-10 and 2010-11. These notices also included service tax demands raised under the category of ‘Club or Association and Advertising Services', ‘Mandap Keeper Services', ‘Renting of Immovable Property Services' and "Sale of space or time for advertising'.

Since the CCE & ST, Nagpur confirmed these demands and imposed penalties and interest, the appellant is before the CESTAT.

It is submitted that bulk of demand is under the category of ‘Business Support Services' and the amount under other categories is approximately Rs. 1.8 crores against which they have already made a pre-deposit of Rs. 1.63 crores.

As for the majority of the demand of Service Tax, it is submitted that they are not providing any services to BCCI and they are affiliated to BCCI; that from the BCCI's income they are given grant/subsidy for promoting cricket within the region and, therefore, the question of levy of Service tax would not arise at all; that similar proceedings were initiated against the Gujarat Cricket Association and the Saurashtra Cricket Association by the Commissioner of Service Tax, Ahmedabad proposing to demand Service Tax under the category of ‘Event Management Services' on the amounts received from the BCCI and these proceedings were dropped by the jurisdictional Commissioner by Order No. STC/06/COMMR/AHD/2007 dated 24.9.2007 and No. 05/COMMR/2009 dated 27.3.2009; that in the case of Maharashtra Cricket Association, the Commissioner of Central Excise, Pune vide Order No. P-III/BBP/119/05 dated 28.7.2005, dropped the demand on the said assessee in a similar transaction under the category of ‘Event Management Services'; that in the present case, the only difference is that the demand of Service Tax is raised under the category of ‘Business Support Services'. Reliance is also placed on the apex court decision in the case of Secretary, Ministry of Information & Broadcasting Vs. Cricket Association of Bengal- 1995 (2) SCC(161). Inasmuch as the impugned order is not sustainable in law, the appellant submitted.

The Revenue representative reiterated the findings of the adjudicating authority and submitted that in the present case, the demand is made under the category of ‘Business Support Services' for providing infrastructure facility to BCCI and, therefore, the facts of the case are distinguishable from those decided by the Commissioner of Service Tax, Ahmedabad and the Commissioner of Central Excise (Appeals), Pune.

The Bench observed -

"5.1 To come under ‘Business Support Services', service has to be provided in relation to business or commerce and such services which are mentioned under Section 65 (104c) are evaluation of prospective customers, telemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. By way of explanation, the expression "infrastructural support services"has been defined to include providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and Security. The expression ‘infrastructure support service' used in the said Section has to be understood and construed by following the principles of ejusdem generis. In other words the services rendered should be similar to the services mentioned therein. Promotion of cricket or giving the cricket stadium for conducting cricket matches, which is the transaction involved in the present case, is not similar to any of the activities specified in the said section. Further, there is no evidence led by the Revenue to show that the services have been rendered in relation to business or commerce."

The Bench, therefore, took a prima facie view that the appellants have made out a strong case in their favour for grant of stay.

In fine, the CESTAT granted unconditional waiver from pre-deposit of the adjudged dues and stayed recovery during pendency of the appeals.

(See 2013-TIOL-808-CESTAT-MUM)