In the case of India Cements, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that amount received from the sale of tickets for cricket tournaments is not an exempted Service.
A Show Cause Notice has held that the appellant is liable to reverse CENVAT Credit under Rule 6(3) for the reason that they are providing both taxable as well as exempted services. The Department has construed the activity of selling tickets as an exempted service. It was alleged that by the sale of tickets, the appellant is “Providing Opportunity to See Live Matches”.
The appellant argued that there is no service classified as the sale of tickets and providing an opportunity to see live matches. The revenue generated by selling tickets cannot be considered as consideration received for providing any services. When there is no service at all the Department cannot consider it as an exempted service and bring into the application of Rule 6(3) of the CENVAT Credit Rules, 2004 and direct the appellant to pay 6% of the value of the income generated from selling tickets.
In the case of KPH Dream Cricket Pvt. Ltd, wherein it has been held that” the amount received from the sale of tickets for cricket tournament is not a service and therefore no Service Tax is required to be reversed in terms of Rule 6(3) (i) CENVAT Credit Rules, 2004.”
“The amount has been received by the appellant as the sale of a ticket for a cricket tournament which is not service, therefore, when it is not the service, it cannot be termed as service, and no service tax is required to be reversed. Further, for the period 201012, the appellant-assessee has also reversed the said amount, therefore, no demand is sustainable on that account.”, Ms Sulekha Beevi C S, Member (Judicial) and Mr M Ajit Kumar, Member (Technical) held.
Further observed that the explanation 3 to Rule 6(1) of the Cenvat Credit Rules, 2004 was amended vide notification No. 13/2016-C.E. (NT) dated 01.03.2016, wherein the “exempted service” was expanded to include “an activity which is not a service as defined under Section 65B (44) of the Finance Act, 1994” w.e.f. 01.04.2016, for which reversal of Cenvat credit is required. Hence, before this, there was no legal requirement legally binding an assessee to reverse Cenvat credit of inputs or inputs services taken on such activities which are not services under the scope of the said Finance Act, 1994.
Ms. Radhika Chandrasekar appeared for the appellant and Mr. R. Rajaraman appeared for the respondent.
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