At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai
By, THE HONORABLE JUSTICE: S.S. GARG
By, MEMBER AND THE HONORBLE JUSTICE: C.J. MATHEW
For Petitioner: Bharat Raichandani, Advocate And For Respondents: M.P. Damle, Assistant Commissioner (AR)
1. The appellant-assessee has filed the present appeal against the impugned order dated 8.10.2014 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has changed the classification of the impugned services rendered by the appellant-assessee to promoting a brand of goods, services, events, business entity which is defined under Section 65(105)(zzzzq) of the Finance Act, 1994 instead of support services of business or commerce. The Revenue has also filed appeal against the impugned order passed by the learned Commissioner (Appeals) on the ground that the Commissioner (Appeals) wrongly classified the services under the promoting a brand of goods, events and
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business entity etc. whereas the service rendered by the appellant is support services of business and commerce.
2. Briefly the facts of the present case are that the appellant-assessee, Shri Umesh Yadav, is a cricketer who plays cricket for the Indian National Cricket Team and he has been selected by Delhi Daredevils, a franchisee owned by M/s. GMR Sports Pvt. Ltd. Consequently, an agreement was entered into between GMR and the appellant-assessee which was valid upto 31.12.2010 and extended upto 31.12.2013 in terms of which the appellant-assessee is required to play cricket matches for the said team and has received retainer fee. Thereafter on intelligence that the appellant-assessee is rendering business support services to GMR, investigation was carried for the period from 2009-10 to March 2011 and during investigation, it was found that GMR is engaged in construction and infrastructure business. The Board for Control of Cricket in India is the apex governing body for cricket in India. As per various terms of the agreement, it appeared that only the teams who have been permitted to operate as a franchisee can participate in the tournament and nominate their team for IPL. On these allegations, a show cause notice was issued to the appellant demanding service tax under taxable head of business support service as defined under Section 65(105) of the Finance Act, 1994. After following due process of law, the Additional Commissioner vide order-in-original dated 29.11.2013, confirmed the entire demand of service tax along with interest and imposed penalty on the appellant under Section 76 and 77 of the Finance Act, 1994. Aggrieved by the said order, the appellant-assessee filed appeal before the learned Commissioner (Appeals) and the Commissioner (Appeals) vide the impugned order dated 8.10.2014, upheld the order-in-original and rejected the appeal. Hence the present appeal.
3. Heard both the parties and perused the records.
4. Learned counsel submitted that the impugned order is not sustainable in law as the same has been passed without appreciating the facts on the law. He further submitted that the impugned order is contrary to the binding precedent on the same issue. It is his further submission that the impugned order is non-speaking and it has not considered all the submissions of the appellant and has been passed in gross violation of the principles of natural justice. He further submitted that the Commissioner (Appeals) has travelled beyond the show cause notice and has confirmed the demand of service tax under brand promotion service as defined under Finance Act, 1994 whereas this was never the case of the department. The department proposed to demand service tax under business support service and the adjudicating authority has also confirmed the demand of service tax under business support service. He also submitted that when the Commissioner (Appeals) found that the appellant has not provided business support service, then the demand of service tax has to be set aside and the learned Commissioner (Appeals) has no authority to go ahead and confirm the demand of service tax under a new taxable head which was never the case of the department. He further submitted that it is well settled that the department cannot travel beyond the show cause notice and whatever case has been set up by the department in the show cause notice fails and therefore the demand has to be set aside. In support of these submissions, he relied upon the following decisions:-
(i) Swapnil Asnodkar vs. CCE, Goa 2018-TIOL-92-CESTAT-MUM;
(ii) Warner Hindustan Ltd. vs. CCE, Hyderabad : 1999 (113) ELT 24;
(iii) CCE, Goa vs. R.K. Construction : 2016 (41) STR 879;
(iv) Balaji Contractor vs. CCE : Jaipur-II 2017 (52) STR 259;
(v) Sourav Ganguly vs. UOI : 2016 (43) STR 482 (Cal.);
Learned counsel also submitted that in fact the appellant-assessee is not providing any service to the franchisee let alone business support service or brand promotion service and the agreement between the appellant-assessee and the franchisee has been misconstrued by the department.
5. On the other hand, learned AR submitted that the department has also filed an appeal against the impugned order on the ground that the department has issued the show cause notice for classifying the service under business support service and once the show cause notice is issued, the entire proceedings has to be confined to whether these services are classifiable under business support service or not. Learned AR further submitted that the Commissioner (Appeals) cannot change the classification of service at the appellate stage and to that extent the order of the Commissioner (Appeals) is also not sustainable in law.
6. After considering the submissions of both the parties and on perusal of the material on record, we find that the show cause notice 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. Further, we find that this issue has been settled in favour of the assessee by various decisions relied upon by the appellant-assessee cited supra.
Therefore, by following the ratio of the said decisions, we are of the considered opinion that the impugned order passed by the Commissioner (Appeals) going beyond the show cause notice is not sustainable in law and, therefore, we set aside the impugned order and allow the appeal of the appellant-assessee. We also find that the department is also holding the view that the appellant is not liable to tax under the category of brand promotion service. Consequently, we do not find any merit in the departments appeal in view of the various decisions cited supra.
7. Consequently, we allow the appellant-assessees appeal and set aside the impugned order and also dismiss the appeal of the Revenue