2013 (3) TMI 104 - AT - Service Tax

Service tax on sponsorship - reverse charge - appellant is co-sponsor of DLF IPL - held that - 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. - TRU Circular dated 26-2-2010 also indicates Cricket as one of the sports. - co-sponsorship of the matches with the DLF has been granted unconditional waiver by the coordinate Bench in 2012 (5) TMI 404 - CESTAT NEW DELHI - stay granted.

Summary

Issues:
Waiver of pre-deposit of service tax amount under reverse charge mechanism for sponsorship of IPL matches.

Analysis:
The appellant filed a stay petition seeking the waiver of pre-deposit of service tax amount of Rs. 57,13,583/- along with interest and penalties under the Finance Act, 1994. The adjudicating authority confirmed the amounts, imposing penalties based on the appellant's liability under the reverse charge mechanism for sponsoring IPL matches. The appellant argued that prior to the amendment from 1-7-2010, sponsorship in relation to sports events was excluded from service tax liability under the reverse charge mechanism. Reference was made to a similar case involving DLF Limited, where an unconditional stay was granted by the coordinate Bench at Delhi. The department contended that the appellant, as a co-sponsor, was liable for the service tax, emphasizing that IPL matches were not considered sports events.

Upon considering both sides' submissions, the Tribunal found that the appellant was indeed a co-sponsor of the IPL matches with DLF Limited. It was noted that the definition during the relevant period excluded service tax liability on the sponsorship of sports events, but subsequent amendments brought such sponsorships under the service tax net. The Tribunal also referenced a TRU Circular indicating cricket as a sport. The argument that the coordinate Bench had granted unconditional waiver to DLF Limited for the same issue carried weight. Consequently, the Tribunal concluded that the appellant had established a strong prima facie case for the waiver of pre-deposit. As a result, the application for the waiver was allowed, and recovery of the amounts was stayed pending the appeal's disposal. The decision was pronounced in court by the Tribunal.