Gulf Oil Corporation Ltd VERSUS C.C.E. & S.T.-Vapi

Excise Appeal No.10563 of 2013

(Arising out of OIA-SRP/146/VAPI/2012-13 dated 20/12/2012 passed by Commissioner of

Central Excise-VAPI)

 

Gulf Oil Corporation Ltd

VERSUS

C.C.E. & S.T.-Vapi

 

APPEARANCE:

Shri Anandodaya Mishra, Advocate for the Appellant

Shri Prakash Kumar Singh, Superintendent (AR) for the Respondent

CORAM: HON’BLE MEMBER (JUDICIAL), MR. RAMESH NAIR

HON’BLE MEMBER (TECHNICAL), MR. RAJU

Final Order No. A/10234 /2023

DATE OF HEARING: 16.01.2023

DATE OF DECISION: 07.02.2023

RAMESH NAIR

The brief facts of the case are that during the course of audit

conducted by the Central Excise Department, it was noticed by the audit

party that the appellant has availed credit of Rs.1905500/- on the invoice

issued by M/s. K.P.H. Dream Cricket Pvt. Ltd. (KPH) for promotion of the

product of the appellant such as logo, trademark, products manufactured by

the appellant. The service provider M/s. KPH has discharged the service tax

and issued the invoice.

2. The case of the department is that the service is correctly classifiable

under Sponsorship Service according to which the service recipient is

required to pay the service tax in terms of Rule 2(1)(d)(iv) of Service Tax

Rules, 1994 therefore, the service tax under the head of Business Auxiliary

Service by the service provider is incorrect and consequentially the appellant

is not entitled for the cenvat credit.

3. Shri Anandodaya Mishra, Learned counsel appearing on behalf of the

appellant submits that since service provider has paid the service tax under

Business Auxiliary Service and the same has not been challenged by the

department neither classification can be disputed at the recipient end nor the

cenvat can be denied on the charge that due to service classifiable under

Sponsorship Service since the appellant is liable to pay the service tax,

credit is not available. He placed reliance on the following judgments:

 IDEA CELLULAR LTD.- 2016 (8) TMI 1122- CESTAT MUMBAI

 M/s. PARASRAMPURIA SYNTHETICS LTD.- 2005 (191) ELT 899

 M/s. MAERSK INDIA PRIVATE LIMITED- 2008 TIOL 1477

4. Shri Prakash Kumar Singh, learned Superintendent (AR) appearing on

behalf of the revenue reiterates the finding of the impugned order.

5. On careful consideration of the submission made by both the sides and

perusal of records, we find that the cenvat credit was denied to appellant on

the ground that service being classifiable under Sponsorship Service, the

appellant was supposed to discharge the service tax under GR-7 Challan. We

find that the service provider M/s. K.P.H. Dream Cricket Pvt. Ltd. has

classified the service under Business Auxiliary Service, in such case it is the

service provider who is suppose to pay the service tax and the appellant can

take the cenvat credit only on the basis of invoice issued by the service

provider. The entire basis of the department’s case is dispute on the

classification made by the service provider M/s. K.P.H. Dream Cricket Pvt.

Ltd. We find that M/s. K.P.H. Dream Cricket Pvt. Ltd. has classified the

service under Business Auxiliary Service and discharged the service tax and

issued the invoice. Firstly, the classification of service cannot be disputed at

the recipient end secondly, the classification of service maintained by the

service provider M/s. K.P.H. Dream Cricket Pvt. Ltd. has been considered in

judgment of COCA COLA INDIA PVT. LTD. reported at 2015 (38) STR 497

which is reproduced below:-

After hearing both the sides, we find that the appellant entered into a

contract with an agreement with KPH Dream Cricket Pvt. Ltd. for

sponsoring the Cricket team Kings XI Punjab. On the said contractual

consideration, a Service Tax of Rs. 37,08,000/- was collected by M/s.

KPH from the present appellant and deposited with the Central

Government under the category of Business Auxiliary Service. There

is no dispute about above factual position.

2. However, subsequently Revenue entertained a view that the

agreement between the appellant and M/s. KPH was falling under the

category of sponsoring service and, as such, the tax liability fall on

the appellant on reverse charge basis. Accordingly, proceedings were

initiated against them for recovery of the said tax amount of Rs.

37,08,000/-. The said proceedings resulted in passing of an order by

the original adjudicating authority confirming the tax liability along

with interest and imposing penalties also. The order so passed, was

upheld by Commissioner (Appeals), hence the present appeal.

3. For better appreciation, we reproduce the relevant paragraph

from the impugned order of Commissioner (Appeals) :-

“5.3 Although the amount of Service Tax has been paid by the

appellant and deposited by KPH under the taxable head „business

auxiliary service‟. But in view of the instructions of C.B.E. & C. No.

42/Comm (S.T.), dated 8th February, 2008 sponsorship of a Cricket

team may not be outside the scope of sponsorship service and

Service Tax is required to be paid by the appellant. As the Service

Tax is paid the Service Tax for their own tax liability the appellant is

required to pay Service Tax on the services rendered by them under

sponsorship service which is independent tax. Case laws cited by

appellant 2010 (18) S.T.R. 803 (Com. A) and 2009 (13) S.T.R.

421 (Tri.-Ahmd.) does not support their case as in this case

classification of services rendered has changed from business

auxiliary services to independently classifiable services namely

sponsorship service”.

4. As is seen from above, the payment of Service Tax in respect of

the same service is not being disputed by the Revenue. However,

their contention is that the sponsoring of the Cricket team amounts

to providing sponsoring service and as such the liability would fall

upon the appellant. Commissioner (Appeals) has also held that

sponsoring of a Cricket team is not outside the scope of sponsorship

service.

5. Apart from noting that the issue of sponsorship of Cricket has

been held to be not covered by the sponsorship service, by the

Tribunal in the case of Hero Motocorp Limited v. CST, Delhi reported

in 2013 (32) S.T.R. 371 (Tri. – Del.), which would not cast any

obligation on the appellant to discharge Service Tax, we also note

that the Service Tax on the same transaction already stands

deposited by M/s. KPH, under the category of Business Auxiliary

Services. Demand of Service Tax in respect of the same transaction

on the ground that the deposit of Service Tax was under a different

category whereas a different category of service has been provided

cannot be held to be justifiable.

6. In view of the foregoing, we set aside the impugned order and

allow the appeal with consequential relief to the appellant.

From the above judgment, it can be seen that the only difference is that in

the present case the cenvat credit was denied on the same ground on which

the service tax was demanded in the above case. The dispute was same that the service falls under Sponsorship Service however, the tribunal in the case

of COCA COLA INDIA PVT. LTD. (supra) held that at the recipient’s end the

classification cannot be changed. Following the said judgment in the present

case, we are of the considered view that since the classification of service

cannot be challenged at the recipient’s end, the cenvat credit availed by

them cannot be disputed.

6. Accordingly, the impugned order is set aside. Appeal is allowed.

(Pronounced in the open court on 07.02.2023)

(RAMESH NAIR)

MEMBER (JUDICIAL)

(RAJU)

MEMBER (TECHNICAL)