By TIOL News Service

MUMBAI, AUG 28, 2018: APPELLANT have constituted a separate sub-committee namely Indian Premier League (IPL) for organizing T-20 cricket competitions in India and abroad. During the course of organizing the said tournaments, they hired the services of certain non-resident service providers namely M/s IMG and M/s Hawkeye for producing the live feed of the cricket matches being played in India to be telecasted on various TV Channels, against payment of commercial consideration.

The services received by the Appellant, were classifiable under the category of "Programme Producer's Service" and were leviable to Service Tax and since the services were being provided by the non-resident service provider, the service tax liability was required to be discharged by the Service Recipient.

SCN demanding service tax not paid during the months of August and September 2010 was issued and confirmed by the Commissioner along with interest and penalties. The amounts paid were appropriated by the adjudicating authority.

In appeal, it is submitted that the entire exercise is revenue neutral as they are required to pay the service tax on their output services under the category of "Commercial Use or Exploitation of an Event" and the tax demanded/paid is available to them as CENVAT credit. Furthermore, the adjudicating authority ought to have exercised his powers u/s 80 of FA, 1994 and waived the penalty. It is also emphasized that on the same issue, for the earlier period the demand was confirmed by the Tribunal and upheld by the apex court; however, the output service provided by them, at that time, was not a taxable service.

The AR supported the order and also mentioned that there could not be any dispute in respect of levy of tax since the earlier order of the Tribunal has been affirmed by the Supreme Court. Moreover, revenue neutrality cannot be made applicable as it is not a global concept and the decisions relied upon were clearly distinguishable.

The Bench considered the submissions and inter alia observed -

On Merits:

+ There is no dispute about the fact the services provided by the non-resident service providers namely M/s IMG and M/s Hawkeye for producing the live feed of the cricket matches being played in India for the appellants have been held to be classifiable as "Programme producer's Service" and hence liable to service tax under the said category. [ Board of Cricket Control for India - 2014-TIOL-1774-CESTAT-MUM upheld by the Apex Court - 2015-TIOL-04-SC-ST . Thus the service tax in respect of this service was due from the Appellant on reverse charge basis and was to be paid by them on the due date as prescribed.

On Revenue neutrality & Penalty :

+ The argument advanced by the Appellant do not appear to be convincing as in the present case the Service Tax liability which is being determined, is in respect of the services received by them from the non-resident service provider. This is not the case of payment of tax on the forward charge basis, and the tax is payable by the recipient of the service, as if the same was due from the service provider. All the cases referred to by the Appellant are in respect of the demand of tax/ duty on the forward charge basis.

+ If the argument of revenue neutrality is accepted as permissible defense in the present case, entire scheme of payment of taxes on reverse charge basis will become otiose and no business liable to pay service tax would be required to pay service tax in respect of services received by them from non-resident service providers, for the reason that the tax so paid will be available as credit to them.

+ It is a settled principle in law by various, that penalty under section 76 is imposable for the delay in payment of service tax.

In fine, the impugned order was upheld and the appeal was dismissed as being devoid of merits.

(See 2018-TIOL-2641-CESTAT-MUM)