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ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.1987 OF 2022
The Board of Control for Cricket in India (BCCI) .. Petitioner
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Mr.Sriram Sridharan for Petitioner.
Mr.Jitendra Mishra a/w Mr.Satyaprakash Sharma for Respondent.
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ORAL JUDGMENT
2. By this petition filed under Article 226 of the Constitution of India, the petitioner seeks following reliefs:- “(a) that this Hon’ble Court be pleased to issue a Writ of Certiorari or any other Writ, order or direction under Article 226 of the Constitution of India to quash and set aside the impugned Order dated 02.12.2019 (Exhibit-A) issued by the Respondent No.2 after going into the validity and legality thereof; (b) that this Hon’ble Court be pleased to issue a Writ of Certiorari or any other Writ, order or direction under Article 226 of the PRANESH NANDIWADEKAR Constitution of India to allow the Rectification Application No.85434, 85436, 85437, 85348/19 filed by the Petitioner before the Customs, Excise and Service Tax Appellate Tribunal and to grant the Petitioner the consequential reliefs thereof;
(c) that this Hon’ble Court be pleased to issue a Writ in the nature of
Mandamus or any other Writ, order or direction under Article 226 of the Constitution of India directing the Respondent No.2 to readjudicate the Rectification Application Nos.85434, 85436, 85437, 85348/19 as per law.”
3. Brief facts in the present petition are as under:- The petitioner is a society registered under the Tamil Nadu Societies Registration Act, 1975 and is also registered under the Finance Act, 1994 (Service Tax). On 21st January 2008, the petitioner entered into an agreement, for grant of Media Rights, with MSM Satellite (Singapore) Pte. Ltd. and World Sport Group (India) Pvt. Ltd. for telecast of Indian Premier League (IPL) Matches. The said agreement was superseded by an agreement dated 25th March 2009. On 14th October 2009, four show cause notices were issued for the periods between 2007-08 and 2011-12. The issue raised in the show cause notices were whether the petitioner is engaged in rendering the “franchisee” services and whether the services rendered under the aforesaid agreement constitutes the “export of service” under the Export of Service Rules, 2005. The petitioner filed a reply to the show cause notice. On 19th August 2015, the aforesaid show cause notices came to be adjudicated and the Order-in-Original was passed rejecting the contention of the petitioner that they are engaged in export of service and furthermore, the services of the petitioner constitutes “franchisee services” as defined under the Service Tax.
4. Being aggrieved by the aforesaid Order-in-Original, the petitioner filed an appeal before the Customs, Excise & Service Tax Appellate Tribunal,West Zonal Bench, Mumbai (for short “the Tribunal”). December 2018, the Tribunal disposed of the aforesaid appeal by a detailed order running into 100 pages. The Tribunal dismissed the appeal of the petitioner and gave a finding that the services had been rendered in India and therefore, does not qualify as Export of Services. The Tribunal also analyzed the period of dispute under consideration between pre 27th February 2010 and post 27th February 2010, on which date, the Export of Services Rules, 2005 were amended.
5. Being aggrieved by the Tribunal’s order, the petitioner made an application, under Section 35C(2) of the Central Excise Act as made applicable to the Service Tax by virtue of Section 86(7) of the Finance Act, 1994, for rectification of mistake in the order dated 10th December
2018. On 2nd December 2019, Tribunal dismissed the rectification application holding that the petitioner is seeking to review the findings recorded in the original order which cannot be the subject matter of rectification of mistake.
6. Being aggrieved by the above said order of the Tribunal dated 2nd December 2019, the petitioner has approached this Court by filing a writ petition under Article 226 of the Constitution of India to contend that the Tribunal erred in holding that there is no mistake apparent on record.
7. Heard learned counsel for the petitioner and the respondent. We have perused the records of the petition with the assistance of the counsel.
8. Before us the petitioner has contended that there are three errors in the Tribunal’s order dated 10th December 2018 which read thus:- “i. Error No.1: For FY 2011-12, the CESTAT has committed a clear mistake apparent on record by holding that the Petitioner had not received the entirety of the consideration in foreign exchange; ii. Error No.2: For FY 2010-11, the CESTAT answered the question of law in favour of the Petitioner, but erred in not allowing the Petitioner’s Appeal for the period 2010-11 in the operative portion of the Final Order dated 10.12.2018; iii. Error No.3: The Petitioner had cited the decision of the CESTAT in Commissioner of Service Tax-VI v. Balaji Telefilms Ltd. (2016 43 STR 98 (Tri-Mum)) in support of its case on merits. This was distinguished by the CESTAT on the sole premise that the feed in the present matter did not leave India whereas the feed in the Balaji Telefilms case left India prior to returning to India. This is a clear factual error since the Petitioner’s feed undoubtedly does leave India.”
9. We have perused the original order of the Tribunal dated 10th December 2018 which was subject matter of rectification proceedings. On perusal of the said order, we are of the view that the Tribunal has extensively dealt with the issues raised in rectification application in paragraphs 7.8, 7.[9] and 7.10 of the original order dated 10th December 2018 which read thus:- “7.[8] With effect from 27.02.2010, when the condition relating to receipt place of provision and use have been omitted, the situation changes. Since the service provided falls within category (iii) service the location of the service recipient, determines whether the service can be treated as export of service, subject to the requirement that the consideration for the said services are received in convertible foreign exchange. In the show cause notice for the period post 27.02.2010, the benefit of export of service has been allowed to the extent of payment received in convertible foreign exchange from M/s. MSM Singapore. It is uncontroverted fact that entire consideration in respect of media rights agreement was not received in convertible foreign exchange. Quiet substantial amount in terms of the said agreement was paid by M/s. Sony Picture Entertainment Limited a subsidiary of M/s. MSM Singapore from its advertisement revenues to appellant as a consideration for the service provided by the appellant. In para 5, of the adjudication order, the mode of payment has been explained, and is reproduced in table below: (emphasis supplied) Invoice No. Amount in INR Date of Receipt Document No. Amount in INR Before TDS deduction After TDS deduction MSM-IPL- 2011-12 dtd. 28.02.11 4983810769 07.03.11 SCSQ063001 2351690000 2116521000 30.06.11 IT36701106270984 280430770 252387693 29.09.11 IT3671109270985 2351690000 2116521000 4983810770 4485429693 Out of the total payments received payments mentioned on 30.06.11 and 07.03.11 has been received M/s. Sony Pictures Entertainment on behalf of MSM Singapore. The net amount after TDS deduction has been credited in the Appellant Bank Account with HDFC Bank. Further income of Rs.34,64,40,768/- has been received from sub licensees M/s. WSG. It is admitted fact that appellant has themselves claimed benefit of export of service in respect of certain part of the income from media rights agreement. However they have not claimed the said benefit in respect of entire amount. This would be for the reason that entire income from media rights is not received in convertible foreign exchange. (Para C.12 of the submissions). 7.[9] From the para 7 of show cause notice dated 13.03.2013 it is quite evident in respect of the payments received from M/s. MSM Singapore demand has been made in respect of those amounts which are not in convertible foreign exchange and cannot treated as export of service. The said para of Show Cause Notice dated 13.03.2013 is reproduced below:- “7. On scrutiny of ST-3 Returns for 2011-12 filed under ‘Commercial use and Exploitation of events’, it is observed that BCCI has claimed amount received against export of service of Rs.416,98,88,398/- (i.e. Rs.175,46,33,398/- plus Rs.241,52,55,000/-). Under Franchisee Services BCCI has not claimed any amount received against export of service. Department has already issued various SCNs under ‘franchisee services’ on the issue as mentioned in Para-03 above which are pending for adjudication. BCCI has claimed export of service on media right income in ST-3 for 2011-12 for Rs.416,98,88,398/-. The representative of BCCI has clarified that out of the said amount, the amount of Rs.256,83,00,000/pertains to ESPN Singapore and remaining amount of Rs.160,15,88,396/- pertains to MSM Singapore. However, on going through the balance-sheet for 2011-12, it was noticed that out of the total export income from media right of Rs.533,92,51,537/-, the income of Rs.498,38,10,769/- pertains to M/s. MSM Singapore, as mentioned in para 05 and 06 above. However, as against the export income of Rs.498,38,10,769/-, they have claimed only Rs.160,15,88,396/- from M/ s. MSM Singapore, in their ST-3 Returns. For the balance amount of Rs.338,23,00,002/- they could not offer any explanations or documentations. In the absence of any explanation, the said income of Rs.338,23,00,002/- appears to be liable for payment of service tax. As such on the balance amount of Rs.338,23,00,002/- BCCI is required to pay service tax at the rate of 10.30% which works out to Rs.34,83,76,900/-. In view of this, the BCCI is not entitled to claim export of services on the following amount:- Name of the party Export of Service Amount Disallowed Service tax Payable 10.30%. M/s. MSM, Singapore Rs.338,23,00,002/- Rs.34,83,76,900/- M/s. World Sport Group India Pvt. Ltd. Rs.34,64,40,768/- Rs.3,56,83,399/- Total Rs.372,87,40,770/- Rs.38,40,60,299/-
7.10 Thus in view of the discussions as above and the decisions referred we are of the view that benefit under Export of Service Rules, 2005 could not have been extended to the appellant, for the period prior to 27.02.2010. For the period after 27.02.2010, the said benefit has been extended to the appellant, to the extent they have shown that the payment against the said services was received in convertible foreign exchange.”
10. We propose to deal with each of the errors separately. Before we proceed to examine the issues, it is apt to reproduce relevant provision of Section 35C(2) as made applicable to Finance Act, 1994 on powers of the Tribunal to rectify mistake apparent from record. “35C. Orders of Appellate Tribunal.— (1) …… (2) The Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendments if the mistake is brought to its notice by the Principal Commissioner of Central Excise or Commissioner of Central Excise or the other party to the appeal: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the other party, shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard.
11. a) Error No.1:-
1. Error No.1: For FY 2011-12, the CESTAT has committed a clear mistake apparent on record by holding that the Petitioner had not received the entirety of the consideration in foreign exchange.
(i) The petitioner contended that for the financial year 2011-12, the Tribunal has committed a clear mistake apparent on record by holding that the petitioner has not received the entirety of the consideration in foreign exchange. The respondent has supported the Tribunal’s impugned order and contended that this is not a mistake apparent from record.
(ii) With respect to error no.1, the Tribunal in paragraph 7.[8] & 7.[9] of its original order dated 10th December 2018 (reproduced above), has given a finding that the petitioner had themselves claimed benefit of export of service in respect of certain part of the income from media rights agreement. However, they had not claimed the said benefit in respect of the entire amount since the entire amount is not received in convertible foreign exchange.
(iii) The Tribunal has recorded that it is uncontroverted fact that entire consideration in respect of media rights has not been received in convertible foreign exchange, thereby rejecting the contention of the petitioner on this count as recorded at page 13 (o) of the original order of the Tribunal that they have received entire consideration in foreign exchange. The Tribunal has further observed that substantial amount is received from Sony Picture Entertainment India Ltd. on behalf of M/s. MSM Singapore Pte. in Indian Rupee. The Tribunal has also considered paragraph 7 of the show cause notice on this issue which is reproduced in paragraph 7.[9] of the Tribunal’s original order which is reproduced hereinabove. The said paragraph states the discrepancies in various figures and failure of the petitioner in explaining the same.
(iv) In paragraph 6 of the reply dated 9th August 2012 filed by the petitioner, itself has stated that the amount proposed to be taxed (Rs.3959692308) includes receipt from M/s. MSM, WSG & ESD. Therefore, the petitioner’s claim in a reply to the show cause notice itself shows that admittedly the claim for export was not claimed for the entire amount. The petitioner has not rebutted paragraph 7 of the show cause notice which is reproduced in Tribunal’s order on this issue. The petitioner has not given a break up of the receipt in foreign exchange on the amount on which the claim was made. It is neither in the reply to the show cause notice nor before the Tribunal and therefore, the Tribunal in its order has accepted the said part of show cause notice that the petitioner has not given any explanation nor any documentation.
(v) In our view, the submission of the petitioner that the Tribunal’s finding that the petitioner has not received the entirety of the consideration in foreign exchange cannot be construed as a mistake apparent from the record. The fact that the petitioner has made an attempt to canvass this point by drawing attention to various documents for 2 hours itself indicates that such error cannot be construed as a mistake apparent from the record. It would amount to reconsideration of the disputed facts on record. In our view, this is a disputed question of fact whereby the contention of the petitioner that they have received full consideration in foreign exchange has been rejected by the Tribunal and same is also disputed in show cause notice. Such a disputed question of fact cannot constitute mistake apparent from record.
(vi) Therefore, in our view, the Tribunal was justified in observing that what is sought to be attempted by the petitioner in the rectification application is a review of the order which cannot be done under Section 35C(2) of the Central Excise Act as applicable to the Service tax. In this connection, it is relevant to reproduce paragraph 4.[7] of the Tribunal’s order rejecting rectification application dated 2nd December 2019 which reads thus:- “4.[7] From perusal of the grounds raised in the application made by the applicants are seeking to review the findings recorded by us in our own order. It is not the case of the applicant that the certain facts or arguments have not been considered by the tribunal but the case made for recall of the order, is that the findings recorded are erroneous. In our view, such recall of the order to render fresh findings in the matter is not within the scope of the rectification as envisages under Section 35C(2). An erroneous finding of fact or in law needs to be challenged by way of the appeal as provided in law and cannot be the reason for recall and rectification.”
(vii) In view thereof, we do not think that the Tribunal was wrong in rejecting the rectification application on error no.1.
12. b) Error No.2:-
2. Error No.2: For FY 2010-11, the CESTAT answered the question of law in favour of the Petitioner, but erred in not allowing the Petitioner’s Appeal for the period 2010- 11 in the operative portion of the Final Order dated 10.12.2018;
(i) With respect to second error, the petitioner submitted that although the Tribunal has answered the question of law in favour of the petitioner but erred in not allowing the petitioner’s appeal for the period 2010-11 in the operative portion of the final order dated 10th December
2018.
(ii) With respect to error no.2, the Tribunal in paragraph 7.10 in its original order which is reproduced hereinabove, categorically observed that for the period post 27th February 2010, the said benefit has been extended to the petitioner, to the extent they have shown that the payment against the said services was received in convertible foreign exchange. Therefore, in our view, the petitioner cannot contend that although the question of law is answered in favour of the petitioner, the Tribunal in the operative portion has not given any such finding. In paragraph 7.10 of the original order dated 10th December 2018 (which is reproduced hereinabove), the Tribunal has categorically held that post 27th February 2010, the petitioner has been given benefit of export, to the extent of payment received in convertible foreign exchange. In view thereof, the same cannot constitute a mistake apparent on record.
13. c) Error No.3:iii. Error No.3: The Petitioner had cited the decision of the CESTAT in Commissioner of Service Tax-VI v. Balaji Telefilms Ltd. (2016 43 STR 98 (Tri-Mum)) in support of its case on merits. This was distinguished by the CESTAT on the sole premise that the feed in the present matter did not leave India whereas the feed in the Balaji Telefilms case left India prior to returning to India. This is a clear factual error since the Petitioner’s feed undoubtedly does leave India.
(i) With respect to error no.3, the petitioner has contended that the decision cited before the Tribunal in case of Commissioner of Service Tax-VI vs. Balaji Telefilms Ltd.[1] has been wrongly distinguished by the Tribunal and therefore, it constitutes a mistake apparent on record. On a query posed to the petitioner as to whether wrong distinction of a particular decision made by the Tribunal can at all constitute a mistake apparent on record, the petitioner was fair to contend that it cannot be the case. In any view of the matter, whether the decision of Balaji Telefilms (supra) has been correctly 1 2016 (43) STR 98 (Tri.-Mum) appreciated by the Tribunal or not, would require debate and which certainly cannot constitute a mistake apparent from the record. The Tribunal in its original order dated 10th December 2018 in paragraph 7.[4] have dealt with this decision and observed that it is distinguishable on facts. Therefore, in our view, the Tribunal was justified in rejecting the rectification application filed by the petitioner with respect to error no.3 since same would not amount to ‘mistake apparent from record.’
14. Section 35C (2) read with Section 83 of the Finance Act, 1994 empowers the Tribunal to rectify the order only on mistakes which are apparent from record. The phrase ‘mistake apparent from record’ has been explained by the Supreme Court as far back as in the year 1971 in case of T.S. Balaram, Income Tax Officer, Company Circle IV, Bombay Vs. Volkart Brothers & Ors.[2] wherein the Supreme Court held that a debatable point of law cannot constitute a mistake apparent from the record on which two opinions are conceivable, it cannot be said to be an error apparent on the face of the record. In the present case as observed by us above, none of the errors agitated constitutes mistake apparent from 2 (1971) 82 ITR 50 record. The observation of the Supreme Court in case of T.S. Balaram, Income Tax Officer, Company Circle IV, Bombay Vs. Volkart Brothers & Ors. (supra) is worth noting which reads thus:- “A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question. In Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale, (1960) 1 SCR 890, this court while spelling out the scope of the power of a High Court under article 226 of the Constitution ruled that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the record – see Sidhramappa Andannappa Manvi v. Commissioner of Income Tax, (1952) 21 ITR 333 (Bom.).”
15. The ratio of the above referred judgment holds field even today. The said decision has been followed in decision of the Supreme Court in case of Commissioner of Central Excise, Belapur, Mumbai Vs. RDC Concrete (India) P. Ltd.[3] The relevant paragraph 16 reads thus:- “16. Upon perusal of both the orders viz. earlier order dated 4th November, 2008 and order dated 23rd November, 2009 passed in 3 2011 (270) ELT 625 (SC) pursuance of the rectification application, we are of the view that the CESTAT exceeded its powers given to it under the provisions of Section 35C(2) of the Act. This Court has already laid down law in the case of T.S. Balram v. M/s.Volkart Brothers, 82 ITR 50 to the effect that a "mistake apparent from the record" cannot be something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. It has been also held that a decision on a debatable point of law cannot be a mistake apparent from the record. If one looks at the subsequent order passed by the CESTAT in pursuance of the rectification application, it is very clear that the CESTAT re-appreciated the evidence and came to a different conclusion than the earlier one. At an earlier point of time, the CESTAT came to a conclusion that the company to which the respondent-assessee sold its goods was an interconnected company. In the circumstances, according to the CESTAT, the decision of the department to appoint a Cost Accountant to ascertain value of the goods manufactured by the asessee was considered to be just and proper. However, after considering the submissions made in pursuance of the rectification application, the CESTAT came to a different conclusion to the effect that the asessee company and the buyer of the goods were not inter-connected companies. Different conclusions were arrived at by the CESTAT because it reappreciated the evidence in relation to common directors among the companies and inter se holding of shares by the companies. Re-appreciation of evidence on a debatable point cannot be said to be rectification of mistake apparent on record.”
16. In view thereof and for the reasons stated above, the Tribunal’s order rejecting application of the petitioner to rectify mistake apparent from record in its order dated 10th December 2018 cannot be faulted. Petition is dismissed. No order as to costs.
JITENDRA JAIN, J. G. S. KULKARNI, J.