Supreme Court deletes Tribunal's Strong words against adjudicating authority
IN the case of Citibank NA vs Commissioner of Service tax, Mumbai - (2014-TIOL-1284-CESTAT-MUM), the CESTAT Mumbai Bench observed,
2. Appellant filed this appeal against the adjudication order passed by the adjudicating authority whereby a demand of Rs.5,76,80,000/- is confirmed with interest and penalties were also imposed.
3. The demand is confirmed on the ground that the appellant had received Sponsorship Service and the appellant has not paid the service tax.
4. Brief facts of the case are that the appellant received sponsorship service from the Board of Control for Cricket in India in respect of Indian Premier League Cricket matches.
5. We find that the issue is now settled by the decision of the Tribunal in Hero Honda Motors Ltd vs CST, Delhi - whereby the demands were made on the same grounds and the Tribunal held as under:
"15. The above analysis of the adjudication authority, creative as it goes, defies comprehension. On a true and fair analysis of the sponsorship agreement, that the sponsorship agreement is in relation to cricket tournaments conducted under the auspicious of BCCI/ IPL; that cricket is a sport; and the tournament (league) by the nature of its process is a sporting event, is indisputable. To dissect the generic composition of the sponsorship agreement by reference to a circumstance that payments are made not to the T-20 tournament of cricket matches but to the BCCI/ IPL (which is not a game), is an extravagant and logically misconceived analysis. Surely, it is not anybody's case that the payments were made to BCCI/ IPL for the latter's intrinsic brand image and not for or in relation to the tournament (T-20, which is the subject matter of the sponsorship agreement). The charging provision clearly excludes from chargeability to service tax, sponsorship in relation to sports events. The expression ‘in relation to' connotes activities associated with sports events. |
16. On the analysis above we conclude that the several adjudication orders, impugned in these appeals are predicated on a raft of fundamental fallacies: |
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17. Both fundamental premises of the adjudication authority are misconceived and unsustainable. The impugned adjudication orders are therefore quashed" |
6. In view of the above decision, the impugned order is set aside and the appeal is allowed.
The Revenue took the matter in appeal to the Supreme Court. The Supreme Court recently dismissed the Revenue Appeal as it found no merit in the appeal.
However, the Supreme Court was of the opinion that the Tribunal, while allowing the assessee's appeal, ought not to have used strong expressions against the assessing authority. Therefore, the Apex Court deleted those strong expressions used by the Tribunal in the course of the order passed by it.
But what are the strong expressions used by the Tribunal? If you look at the impugned order, you will find that this Bench of the Tribunal had not used any strong expressions; it only extracted from the judgement of another Bench and that too only to follow it.
The deleted strong words were used in the case of Hero Honda Motors - 2013-TIOL-871-CESTAT-DEL.
Maybe these are the strong expressions:
The above analysis of the adjudication authority, creative as it goes, defies comprehension.
To dissect the generic composition of the sponsorship agreement by reference to a circumstance that payments are made not to the T-20 tournament of cricket matches but to the BCCI/ IPL (which is not a game), is an extravagant and logically misconceived analysis.
On the analysis above we conclude that the several adjudication orders, impugned in these appeals are predicated on a raft of fundamental fallacies:
Was the Revenue aggrieved by these words? If so, why didn't they appeal against the Hero Honda decision which was delivered on 10.04.2013 and wait for the Citibank decision?
They actually filed an appeal, but in the wrong forum. They filed the appeal in the Delhi High Court and the High Court dismissed it as, such an appeal was required to be filed in the Supreme Court!
Even though the Revenue was not successful in their appeal as far as revenue was concerned, they can be happy that a few harsh words got deleted - though not really part of the impugned order.