RAHUL DRAVID Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) THESE applications filed by the appellant seek waiver of pre -deposit and stay of recovery in respect of the adjudged dues. On a perusal of the records and hearing both sides, we are of the view that the appeals also have to be summarily disposed of. Accordingly, after dispensing with pre -deposit, we take up the appeals. One of the appeals is directed against a demand of Rs. 51,39,288/ - (service tax + education cesses) for the period 2008 -09 and the associated penalties determined by the Commissioner in adjudication of show -cause notice dt. 19/10/2009. The other appeal is against a similar demand of Rs. 50,05,937/ - (service tax + education cesses) for the period 2009 -10 and the connected penalties determined by the Commissioner in adjudication of show -cause notice dt. 22/10/2010.

(2.) ON a perusal of the records, we note that the appellant as a player of cricket received fees from M/s. Royal Challengers Sports Pvt. Ltd. (Royal Challengers for short) for playing IPL (Indian Premier League) tournaments during the periods of dispute and that the impugned demands of service tax are on these fees. Royal Challengers were the franchisee of the Board of Control for Cricket in India (BCCI). Royal Challengers had also executed Memorandum of Understanding (MoU) with commercial establishments such as M/s. United Breweries Ltd., M/s. United Spirits Ltd. etc. for display of the letters logo/marks/sign on the uniform of the cricketers including the appellant. Apparently, after scrutiny of the MoUs franchisee agreements and player contracts, the Department framed a case against the appellant for recovery of service tax under the head Business Auxiliary Service (BAS) on the fee collected by him from the Royal Challengers. The case of the Department as made out in the relevant show -cause notices is that the appellant was rendering BAS to Royal Challengers by sporting the aforesaid logo/mark/sign which, according to the Department, were in the nature of advertising the products of the aforesaid companies. The show -cause notices accordingly raised demands of service tax on the appellant and proposed penalties on him. Both the show -cause notices relied upon certain documents., copies of which were supplied to the appellant. However, the MoUs referred to in the show -cause notices were not so supplied. Nevertheless, the adjudicating authority considered these documents also while passing the impugned orders. This apart, the main grievance of the appellant is that none of his substantive contentions was considered by the adjudicating authority. The learned counsel for the appellant has submitted that the learned Commissioner has chose to go by Wikipedia and other materials, without referring to the contentions of the assessee, to reach the conclusion that the assessee rendered BAS and was, therefore, liable to pay service tax on the player fees collected from Royal Challengers. In his reply to the show -cause notices, the assessee took the stand that his activity in the tournament field did not attract service tax. He further submitted that cricket was a game of skill and dexterity and not a game of chance like lottery etc. It was submitted that the activity of playing such a game did not involve any taxable element. The assessee, in his replies to the show -cause notices, also claimed the benefit of section 80 of the Finance Act, 1994 challenging the proposal for imposition of penalties under sections 76 & 77 of the Act. The learned counsel has submitted, and rightly so, that none of these contentions engaged the attention of the adjudicating authority which chose to proceed in a tangential manner to confirm the demands of service tax etc. against the assessee. In the circumstances, the learned counsel has urged that the matters be remanded for de novo adjudication.

(3.) ACCORDINGLY , we set aside the impugned orders and allow these appeals by way of remand with request to the Commissioner to pass speaking orders in de novo adjudication of the show -cause notices in accordance with law after giving the party a reasonable opportunity of being heard. Needless to say that all the contentions of the assessee should be duly considered by the adjudicating authority. We further make it clear that the assessee should be given copies of the MoUs referred to in the show -cause notices. It goes without saying that, upon receipt of copies of such documents, the assessee shall have liberty to file additional replies/written submissions vis -a -vis the show -cause notices. Both the appeals and the stay petitions therein are stand disposed of in the above terms.