Case Note & Summary
The petitioner, Board of Control for Cricket in India (BCCI), a society registered under the Tamil Nadu Societies Registration Act, 1975 and registered under the Finance Act, 1994 for service tax, entered into an agreement on 21 January 2008 with MSM Satellite (Singapore) Pte. Ltd. and World Sport Group (India) Pvt. Ltd. for grant of media rights for telecast of Indian Premier League (IPL) matches. The agreement was superseded on 25 March 2009. On 14 October 2009, four show cause notices were issued for periods between 2007-08 and 2011-12, raising issues whether BCCI was engaged in rendering 'franchisee services' and whether the services constituted 'export of service' under the Export of Service Rules, 2005. BCCI filed a reply. On 19 August 2015, the Order-in-Original was passed rejecting BCCI's contention of export of service and holding that the services constituted 'franchisee services'. Aggrieved, BCCI filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which dismissed the appeal. BCCI then filed a rectification application before CESTAT, which was also dismissed. BCCI filed the present writ petition under Article 226 of the Constitution of India seeking to quash the Order-in-Original and to direct CESTAT to re-adjudicate the rectification application. The Court analyzed the Export of Service Rules, 2005 and the definition of 'franchisee services' under the Finance Act, 1994. The Court held that the services rendered by BCCI were exported as the recipient was located outside India and the services were used outside India. The Court further held that the services did not fall under 'franchisee services' as there was no grant of right to use a trademark or brand name. The Court quashed the Order-in-Original and directed CESTAT to re-adjudicate the rectification application in accordance with law.
Headnote
A) Service Tax - Export of Service - Franchisee Service - Finance Act, 1994, Section 65(105)(zzzze) - Export of Service Rules, 2005 - The issue was whether BCCI's grant of media rights for IPL matches to a Singapore-based entity constitutes 'export of service' and not 'franchisee service'. The Court held that the services were exported as the recipient was outside India and the services were used outside India, and that the services did not fall under 'franchisee services' as there was no grant of right to use a trademark or brand name. (Paras 3-10) B) Rectification Application - Customs, Excise and Service Tax Appellate Tribunal - Power to Rectify - The Court held that the Tribunal's rejection of the rectification application was erroneous as there was an apparent error on the face of the record regarding the classification of services. The Court directed the Tribunal to re-adjudicate the rectification application. (Paras 11-15)
Issue of Consideration
Whether the grant of media rights by BCCI for IPL matches constitutes 'export of service' under the Export of Service Rules, 2005, and whether the services rendered by BCCI fall under 'franchisee services' as defined under the Finance Act, 1994.
Final Decision
The Court allowed the writ petition, quashed the Order-in-Original dated 02.12.2019, and directed the Customs, Excise and Service Tax Appellate Tribunal to re-adjudicate the rectification application in accordance with law.
Law Points
- Export of Service Rules
- 2005
- Franchisee Service
- Service Tax
- Finance Act
- 1994
- Rectification Application
- Writ of Certiorari
- Article 226 of the Constitution of India
