PER: R. BHAGYA DEVI

This appeal before us is filed by the appellant M/s. Mysore Race Club Ltd. against the Order-in-Original No.MYS-EXCUS-000-COM-04-14-15 dated 24.06.2014 passed by the Commissioner of Central Excise, Customs and Service Tax Mysore.

2. The issues that have been raised in the impugned order are regarding whether the appellant has provided taxable services which are classifiable under the categories of Commercial Use or Exploitation of Event, Renting of immovable Property, Club or Association, Restaurant and Sponsorship services for the period from 01.04.2008 to 30.06.2012.

3. Heard both sides and perused the regards.

4. At the outset, we find the demand against ‘Club or Association’ services cannot be sustained as it is settled law that the appellant is not liable to service tax for the reason that the services rendered to themselves cannot be considered as a service for a consideration as is held by the Supreme Court in the case State of West Bengal vs. Calcutta Club Limited: 2019 (29) G.S.T.L. 545 (S.C.), therefore the demand to this extent stands set aside.

5. Coming to the services rendered under the category of ‘Commercial Use or Exploitation of Event’, the Commissioner in the impugned order observed that the definition does not limit or restrict taxability to only grant of rights for telecast and the appellant having transmitted the racing events to other clubs permitting the other racing clubs to view such racing events for commercial purposes, it is to be considered as service and is liable to service tax. From the documents placed on record, we find that the appellant receives amounts for downlinking charges and share of income from other clubs and these downlinking charges are the receipts from other clubs towards live transmission of the events organised by the appellant in his club premises. It is also stated that these downlinking charges are for a single activity of permitting the event organised by them to be used commercially by the other clubs and accordingly, the downlinking charges were held to be liable to service tax under the category of ‘Commercial Use or Exploitation of Event’ services as per section 65 (105) (zzzzr) Of the Finance Act 1994.

5.1 The Learned Counsel challenges the demand on the ground that the amount was received for betting which is a subject matter of state levy and hence, the question of service tax liability does not arise. It is also argued that the appellant receives a share of betting revenue from other clubs when they telecast the appellants races and vice-versa; also when the races of other clubs are telecasted in the appellants club. It is stated that this is a mutual reciprocal arrangement among race clubs under Turf Authorities of India and not a commercial service transaction. It is further stated that the betting revenue is subject to betting tax under the respective State Laws and referring to the Circular No.334/2010-TRU dated 26.02.2010, it is submitted that circular clarifies that in the case of commercial exploitations, after the rights are given, it results in provision of another taxable service such as broadcasting service or programme production services. Since in the present case, sharing of the telecast of the race does not result in any further taxable service, the arrangement which is based on Turf Authorities Agreement cannot be subjected to service tax. Also referring to the Circular No.109/2009 dated 23.02.2009, it is submitted that it is a case of sharing of revenue and such sharing of revenue is not liable to service tax.

5.2 We find that as per Section 65(105)(zzzzr) of the Finance Act 1994 ‘Commercial Use or Exploitation of Event’ services means:

“any service provided or to be provided to any person by any other person by granting the right or permitting commercial use or exploitation of any event including an event relating to art, entertainment, business, sports or marriage organised by such other person.”

5.3 It is not in dispute that