2014 (11) TMI 500 - AT - Service Tax

Waiver of pre deposit - Classification of service - Assessee entered in to an Agreement / Arrangement with Gujarat Cricket Association (GCA). By virtue of agreement / arrangement, the appellant could enter into agreement with companies and other clients for sponsorship of sports events and other sports marketing services in the stadium - Held that - Under Operational assistance for marketing only is covered and when we talk of operational assistance of marketing, prima facie, it may not cover the advertisement or facilitation for advertisement which seems to be the activity of the appellant. Prima facie, we are unable to find merits in the stand taken by the Revenue. Nevertheless, the issue is debatable and involves interpretation of service vies-a-vies definition of service and classification of service and in such a situation, confirmation of demand by invoking extended period may not be sustainable. In this case, period involved is April 2007 to March 2008 and show-cause notice was issued on 20.12.2010, thereby rendering the entire demand is beyond normal period of limitation. In view of above, we consider that the appellant is entitled to waiver of pre-deposit. Accordingly, there shall be waiver of pre-deposit and stay against recovery of adjudged dues during pendency of the appeal - Stay granted.

Summary

Issues:
Interpretation of "Business Support Service" for service tax liability and applicability of extended period for demand confirmation.

Analysis:
The judgment in the case involved the interpretation of the term "Business Support Service" for determining the service tax liability of the appellant. The appellant, engaged in sports-related business, entered into an agreement with a cricket association and subsequently with a company for sponsorship of a cricket tournament. The revenue authorities contended that the consideration received by the appellant for this arrangement constituted "Business Support Service" attracting service tax liability. However, the appellant argued that they merely acted as an intermediary and did not provide such a service.

The tribunal analyzed the definition of "Business Support Service" provided under the relevant regulations, which encompassed various services related to business or commerce. The tribunal noted that while the revenue authorities considered the appellant's services as operational assistance, the specific scope of operational assistance for marketing did not seem to cover the advertisement or facilitation for advertisement, which was a key activity of the appellant in this case. The tribunal found merit in the appellant's argument, highlighting the debatable nature of the issue and the need for a detailed interpretation of the services provided by the appellant.

Moreover, the tribunal addressed the issue of the extended period for demand confirmation, as the show-cause notice was issued beyond the normal period of limitation. Considering the complexity and interpretational challenges involved in determining the nature of the appellant's services and the applicability of service tax, the tribunal concluded that invoking the extended period for confirming the demand may not be sustainable. As a result, the tribunal ruled in favor of the appellant, granting a waiver of pre-deposit and a stay against the recovery of adjudged dues during the pendency of the appeal.

In summary, the judgment delved into the intricate interpretation of "Business Support Service" in the context of the appellant's activities, highlighting the need for a nuanced understanding of the services provided and the applicability of service tax. The tribunal's decision to grant relief to the appellant based on the debatable nature of the issue and the procedural aspects surrounding the demand confirmation showcased a balanced approach towards resolving the legal complexities involved in the case.