Service Tax Not Leviable On Cricket Association Clubs's Services To Its Members: CESTAT

Dr. D.M. Misra (Judicial Member) and R Bhagya Devi (Technical Member) stated that the Commissioner's finding that the said LED score board has no nexus with the taxable service provided viz. Mandap Keeper service and other services is also devoid of merit. Therefore, denial of cenvat credit on LED score board cannot be sustained.

The assessee/appellant is an association affiliated to the Board of Control for Cricket in India (BCCI).

Also, they are having a club under the name of Karnataka State Cricket Association Club House which provides services to the members of the association.

A show cause notice was issued to the assessee alleging that they had rendered services under the taxable category of 'sale of space or time for advertisement', renting of immovable property service and failed to discharge appropriate service tax on 'club or association service' and availed irregular cenvat credit on LED score board.

On adjudication, the demands were confirmed with interest and penalty.

The assessee submitted that assessee has entered into an agreement with few entities wherein the respective agreements stipulate that the assessee will be providing space to these entities for display of advertisements. The said advertising agencies further contact third party entities, whose advertisements are displayed while a match is going on. These agencies are the ones that become service providers with respect to the category of “sale of space/time for advertisement service”.

The department submitted that the adjudicating authority observing that the amount received are booked by the assessee under the advertisement charges and hire charges in the about said account which is in conformity with the definition of 'sale of space or time for advertisement service' confirmed the demand of service tax on the same.

The bench disagreed with the observation of the Commissioner and stated that even though the assessee initially in the Financial Year 2004-05 included the value for closing depreciation; however, later the amount of Rs.28,64,140/- was deleted giving effect that no depreciation claimed under the Income Tax Act on the cenvat credit amount availed by the assessee.

In view of the above, the Tribunal modified the order by setting aside the confirmation of demand under the category of 'club or association service' and denial of cenvat credit on LED score board.

Regarding demand under the categories of 'sale of space or time for advertisement service' and 'renting of immovable property service', the bench remanded the matter to the adjudicating authority to recompute the service tax liability with interest for normal period of limitation.

Case Title: M/s. Karnataka State Cricket Association v. Commissioner of Service Tax, Bangalore North

Case Number: Service Tax Appeal No. 25437 of 2013

Counsel for Appellant/ Assessee: G. Shivadass

Counsel for Respondent/ Department: Rajiv Kumar Agarwal, Commissioner (AR)