Service received by cricket players from franchisees for playing is not taxable under Business Support Services, affirming that contracts do not denote independent service provisions.

Per: M.M. PARTHIBAN

This appeal has been filed by Shri Iqbal Abdullah, Mumbai (herein after, referred to as “the appellant”, for short) assailing the Order-in-Appeal No. MUM-SVTAX-002-528&529/16-17 dated 31.10.2016 (herein after, referred together as “the impugned order”) passed by the Commissioner (Appeals), Service Tax-II, Mumbai.

2.1 The brief facts of the case are that the appellant herein is a professional cricket player who is playing the game of cricket in many League matches and domestic tournaments such as ‘Ranji Trophy’, ‘Senior One day Tournaments’, ‘NKP Salve Challenger Trophy’ etc. representing ‘Mumbai Team’ from the year 2009 onwards. He has also been participating the Indian Premier League (IPL) matches and had entered into contract with ‘Knight Riders Sports Private Limited’ (herein after referred to as ‘the Knight Riders’, for short) for playing cricket matches in IPL tournaments against remuneration/player fees and other benefits to be received in terms of such contract. For the purpose of payment of service tax on ‘other taxable services’ and for compliance with the Service Tax statute, the appellant is registered with the jurisdictional Commissionerate under service tax registration No. BSTPS5445KSD001.

2.2 During the disputed period from April, 2008 to March, 2012, the appellant had entered into two contracts viz., contract dated 07.01.2009 with the Knight Riders and contract dated 06.04.2011 with Knight Riders & IPL for playing cricket for IPL season-2 and IPL season-4 respectively. BCCI-IPL is a sub-committee of the Board of Control for Cricket in India (BCCI), specifically created for the purpose of holding Indian Premier League Matches. M/s. Knight Riders Sports Private Limited is a franchisee under the consortium, which engages various players to play cricket in the IPL Twenty-20 matches. The appellant herein, Shri Iqbal Abdullah, is a cricket player for such franchisee. On perusal of the contracts entered into with the BCCI-Franchisor i.e., Knight Riders/Knight Riders & IPL, the department observed that the appellant had received certain amount from the said franchisee for providing the taxable service under the category of Business Support Service (BSS), but did not pay service tax on provision of such service for the period from 2008-2009 to 2011-2012.

2.3 Accordingly, Show Cause Notices (SCNs) dated 17.01.2011, 16.04.2012 and 17.10.2012 were issued to the appellant, which had culminated into the issue of Orders-in-Original dated 31.01.2012 and 17.09.2014, wherein the adjudicating authorities have confirmed service tax demands proposed in the SCNs along with interest under Section 73 of the Finance Act , 1994 and imposed penalties under Section 77, 78 ibid. Being aggrieved with such orders of the original authority, the appellant had filed separate appeals before the learned Commissioner (Appeal), who in deciding such appeals by a common impugned order passed in this regard, had partly confirmed the demand of service tax with interest with respect to ‘Brand Promotion Service’ for the period from 01.07.2020 to March, 2012; and dropped the demand of service tax on BSS for the period earlier to 01.07.2020 and the penalty imposed on the appellant under Section 78 of the , 1994. In support of such order, learned First Appellate authority has held that the services of players are primarily used in relation to participation in matches, which cannot be termed as provision of a taxable service, under the category of BSS, in order to be subjected to levy of service tax thereon. Further, by relying on the judgement of the Hon’ble Supreme Court in the case of Nizam Sugar Factory – 2006 (197) E.L.T. 465 (S.C.) he had also held that extended period of limitation is not in