The Supreme Court in its interim order condoned the delay by Revenue in filing Special Leave Petition against an order which had been filed in favor of the assessee challenging the various contractual arrangements and revenue sharing arrangements made by the assessee had been challenged by the Commissioner of Sales.
The assessee, M/s Kolkata Knight Riders Sports Pvt.Ltd had submitted before CESTAT that the income earned from the BCCI is not subjected to levy of service tax. With regards to the applicability of service tax on the fees paid to foreign players. The assessee had also argued that the amount paid to the foreign players as fees cannot be subjected to levy of service tax under the taxable category of Business Support Service (BSS). Assessee had further pointed out they had no contractual relationship with such agents and as such the payments made by the players to their respective agents cannot be subjected to levy of service tax in the hands of the appellant inasmuch as there is no relationship of service provider and receiver adjudged in such type of transaction.
Revenue reiterated before CESTAT that the findings recorded in the impugned order and contesting the service tax demand dropped therein on the ground that such action of the Adjudicating Authority is not proper and justified.
CESTAT had held that the demand of service tax is not sustainable against the appellants. The two member bench also noted that 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. Considering the legal position in respect of CENVAT Credit Rules, 2004 and that the ratio of the above decision squarely applies to the present case in hand, we are of the view that the confirmation of demand of Rs.2,13,57,472/- towards common CENVAT credit reversal is not sustainable.
The two judge bench consisted of Justice B.V. Nagarthna and Justice Sanjay Karol the SC in its interim order condoned the delay and issued notice to the assessee regarding the same.
Revenue was represented by N. Venkatraman. Assessee was represented by N. Venkatraman, Rupesh Kumar, Divyanshu Srivastava, Shashank Bajpai, Udai Khanna, Sandeep Bajaj and Mukesh Kumar Maroria.
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