Sponsorship of sports events was not under reverse charge mechanism prior to 1.7.2010.

PJ/Case Laws/2012-13/1441

Case:- VODAFONE WEST LTD. V/S COMMISSIONER OF SERVICE TAX, AHMEDABAD

Citation:- 2013(29) S.T.R. 63 (Tri. – Ahmd.)

Brief Facts: - The assessee filed this stay petition for the waiver of pre-deposit of amount of service tax of Rs. 57,13,583/- with interest and penalties under various sections of Finance Act, 1994. The said amounts have been confirmed by the adjudicating authority, interest thereof and penalties have been imposed on the ground that appellant is liable to discharge service tax liability under the reverse charge mechanism for the sponsorship of the IPL matches in India.

Appellant’s Contention: - The appellant submits that they are co-sponsor of DLF IPL matches during the relevant period and the service tax liability has been fastened under reverse charge mechanism. He draws attention to the definition under 65(105)(zzzn) in respect of the tax liability in relation to the sponsorship and submit that prior to amendment from 1-7-2010, the sponsorship in relation to sports events were excluded from service tax liability under the reverse charge mechanism. He also submit that in an identical issue, in respect of the very same DLF IPL matches, the department has confirmed the demand against DLF Limited which came before the coordinate Bench at Delhi and the coordinate Bench vide Stay Order No. ST/S/77/12-Cus., dated 13-1-2012 [2012 (27) S.T.R. 512 (Tri.-Del.)] has granted an unconditional stay and he produces the copy of the said stay order.

Respondent’s Contention: - The respondent contends that the appellant is not the only sponsor but is the co-sponsor as per the findings of the adjudicating authority. It is his submission that IPL is not a sports event and reiterates the findings of the adjudicating authority.

Reasoning of Judgment: - The Hon’ble Tribunal held that it is not in dispute that the appellant is co-sponsor of the IPL matches along with DLF Limited. The definition as enshrined in 65(105)(zzzn) during the relevant period specifically excludes the service tax liability on the sponsorship of sports events. Subsequent to amendment to the said definition from 1-7-2010, even the sponsorship of sports event has been brought under the service tax net. They further held that the TRU Circular, dated 26-2-2010 also indicates Cricket as one of the sports. Further, there is a strong force in the contention raised by the appellant that co-sponsorship of the matches with the DLF has been granted unconditional waiver by the coordinate Bench and appellant being on the same footing, he should also be granted unconditional waiver. In view of these reasons, they find that the appellant has made out a strong prima facie case for the waiver of pre-deposit of amounts involved. Accordingly, the application for waiver of pre-deposit of amounts involved is allowed and recovery thereof stayed till the disposal of appeal.

Decision: - The stay application was allowed.

Comment:-The substance of this case is that since during the relevant period service tax liability on the sponsorship of sports events was excluded from liability under reverse charge mechanism and stay has been granted already on the issue, stay application was allowed.

Comments

PJ/Case Laws/2012-13/1441

Post a Comment

Query