2014 (2) TMI 336 - AT - Service Tax

Stay application - Waiver of pre deposit - Sponsorship service - Exigibility before 2010 - Held that - sponsorship activities, prima facie, found to be liable to be excluded from the purview of taxable service prior to the amendment dt. 01/07/2010 to the definition of taxable service under Section 65(105)(zzzn) of the Finance Act 1994, irrespective of the profit motive if any. It is submitted that, prior to 01/07/2010, sponsorship of sports events was not exigible to service tax - Stay granted.

Summary

Issues:
1. Delay in filing an appeal and condonation of the delay.
2. Stay applications seeking waiver and stay against adjudged dues in two appeals.
3. Interpretation of taxable service regarding sponsorship activities and pre-deposit requirements.

Analysis:

Issue 1: Delay in filing an appeal and condonation of the delay
The judgment addresses a delay of 129 days in filing Appeal No. ST/2066/2012. The appellant explained that the impugned order was misplaced by the 'security person,' leading to the delay. The appellant discovered the order during a statutory audit and promptly filed the appeal. The appellant's counsel argued that the delay was inadvertent, and there was no intention to benefit from it. The Additional Commissioner did not oppose the plea for condonation of the delay. The Tribunal, after considering the submissions, decided to condone the delay in filing Appeal No. ST/2066/2012.

Issue 2: Stay applications seeking waiver and stay against adjudged dues
Two stay applications were filed seeking waiver and stay against adjudged dues in two separate appeals. The first appeal sought to dispense with a pre-deposit of Rs.1.28 crores related to service tax and education cesses on sponsorship service for 2009-10, along with penalties. The second appeal requested waiver and stay for Rs.1.21 crores concerning service tax and education cesses on sponsorship service for 2008-09 and connected penalties. The appellant's counsel argued that sponsorship activities were not taxable before 01/07/2010, citing a precedent involving M/s. United Spirits Ltd. The Tribunal found the precedent applicable and granted waiver and stay in both appeals.

Issue 3: Interpretation of taxable service regarding sponsorship activities and pre-deposit requirements
The Additional Commissioner relied on a case involving the Tamilnadu Cricket Association, where a pre-deposit was required for service tax on the 'sale of space for advertisement service.' The appellant argued that service tax amounts included in sponsorship fees were passed on to franchisees without depositing them with the Department. The appellant contended that the show-cause notices did not allege any collection of service tax or non-payment to the exchequer. The Tribunal, considering the period of dispute before 01/07/2010, followed the precedent set in the United Spirits Ltd. case and granted waiver and stay in both appeals.

This detailed analysis of the judgment covers the issues of delay in filing the appeal, stay applications seeking waiver, and the interpretation of taxable service regarding sponsorship activities and pre-deposit requirements.