2013 (7) TMI 984 - AT - Service Tax

Summary

Issues: Appeal against service tax demand under Section 65(105)(zzzn) for sponsorship agreements related to Indian Premier League.

Summary:
The Appellate Tribunal CESTAT Bangalore heard an appeal against a service tax demand of &8377;1,81,50,660/- along with interest and penalties confirmed against the appellants for sponsorship agreements with Indian Premier League team owners. The Revenue contended that the appellants were liable to pay service tax under "Sponsorship Service" u/s 65(105)(zzzn). The appellants argued that the main event of the sponsorship was the cricket sporting event in IPL, citing a previous Tribunal decision in a similar case involving M/s Hero Honda Motors Ltd. The Revenue reiterated the impugned order, but after considering the submissions and the cited decision, the Tribunal held that the activity of sponsorship related to cricket in IPL constituted a sporting event, and therefore, the appellants were not liable to pay service tax under the category of Sponsorship Service. The impugned order was set aside, and the appeal was allowed with any consequential relief.

This judgment clarifies that sponsorship agreements related to sporting events like cricket in the Indian Premier League may not attract service tax liability under Section 65(105)(zzzn) if the primary focus of the agreement is on the sporting event itself. The decision provides guidance on the interpretation of the law in such cases and highlights the importance of considering the nature of the sponsored event in determining service tax obligations.