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2017 (6) TMI 637 - AT - Service TaxWaiver of pre-deposit - Sponsorship of Mumbai IPL Team and M/s.Otago Cricket Association - scope of service - Held that - the assessee is not liable to service tax for sponsorship service - prima facie the applicant has made a case for complete waiver of pre-deposit on that count, therefore, the demand confirmed on account of sponsorship of Mumbai Indian IPL team of ₹ 1,23,60,000 and sponsorship of M/s.Otago Cricket Association of ₹ 1,05,704/- - pre-deposit waived. Sponsorship of IIFA awards - Held that - the services provided by way of sponsorship of the IIFA awards i.e. event were organised at Macau, China, Colombo, Sri Lanka and Toronto, Canada respectively. The sponsorship services were received outside India. The sponsorship services do not have an existence separate from that of the event and it is actually the organization of the event through which the sponsorship services are rendered. The event of IIFA awards is organized outside India and therefore, when the services itself have been rendered outside India, there is no question of levy of service tax liability thereon - as the services consumed outside India, therefore is no levy of service tax - appellant have made out a case of complete waiver of pre-deposit on this account. Service tax on membership fee paid to GSM Association - demand on the ground that the applicant that received club or association services from GSM Association - Held that - The said services under club or association service have been held ultra-vires - prima facie the applicant is not liable to pay service under club or association service. Therefore, the applicant has made out a strong case for waiver of pre-deposit. Cenvat Credit on towers, shelters etc. and the services of constructions, erection and maintenance etc. of the same - extended period of limitation - Held that - prima facie the applicant is not having a case for waiver of pre-deposit - the show cause notice has been issued by invoking the extended period of limitation, therefore, the amount of credit within the limitation of period is required to be paid by the appellant - applicant directed to make pre-deposit. Cenvat Credit on input services for construction of office - denial on the premises that the services resulted in creation of immovable property, which is neither subjected to Excise duty nor service tax - Held that - the Hon ble Punjab & Haryana High Court in the case of Bellsonica Auto Components India Pvt.Ltd. 2015 (7) TMI 930 - PUNJAB & HARYANA HIGH COURT wherein the Hon ble Hgh Court has allowed the credit on construction of office which were used for setting up of building which has further given on lease. Therefore, prima facie the applicant has been able to make out a case for complete waiver in respect of credit on construction of office premises. Cenvat Credit on capital goods like chairs, furniture, etc. - Held that - the applicant has reversed the credit of ₹ 13,20,327/- in respect of the capital goods, like chairs and furniture, therefore, the said reversal of cenvat credit is sufficient in terms of section 35F of CEA, 1944 read with section 83 of FA, 1944. Cenvat Credit taken on the basis of invoices in the name unregistered premises - Held that - A service provider can avail cenvat credit of service tax paid on various input services as long as the said services are used by the service provider for providing the output service if the other requirement of Rule 9 of CCR,2004 have been met - there is no such condition that the input should be received in the premises of the provider of the output service and Rule 3 of CCR, 2004 provides that cenvat credit can be availed when the inputs and capital goods are received in the factory - As the applicant has taken the credit on the basis of invoices in the name of unregistered premises, therefore, the credit cannot be denied to the applicant. Therefore, the applicant has made out a case for complete waiver of pre-deposit.
Issues Involved:
1. Sponsorship of Mumbai IPL Team and M/s. Otago Cricket Association. 2. Sponsorship of IIFA awards. 3. Membership of GSM Association. 4. Cenvat Credit on towers, shelters, and related services. 5. Cenvat Credit on inputs and input services for construction of office. 6. Cenvat Credit on ineligible capital goods like chairs, furniture, etc. 7. Cenvat Credit on the basis of invoices in the name of unregistered premises. Issue-wise Detailed Analysis: Issue No. 1: Sponsorship of Mumbai IPL Team and M/s. Otago Cricket Association The applicant argued that the sponsorship services for the Mumbai Indian IPL team and M/s. Otago Cricket Association fall under the exclusion clause of taxable sponsorship services as defined in section 65 (105) (zzzn) of the Finance Act, 1994. The Tribunal referenced the Hero Motocorp Ltd. case, which determined that sponsorship of a team in relation to its participation in sports events falls within the exclusionary clause and is not taxable. Consequently, the Tribunal granted a complete waiver of pre-deposit for the amounts related to these sponsorships. Issue No. 2: Sponsorship of IIFA Awards The applicant contended that the sponsorship services for the IIFA awards were received and consumed outside India, and thus, no service tax liability arises. The adjudicating authority had confirmed the demand based on Rule 3 (iii) of the Taxation of Services Rules, 2006. However, the Tribunal, referencing the Cox & King India Ltd. case, concluded that since the services were consumed outside India, they are not subject to service tax. The Tribunal granted a complete waiver of pre-deposit for this amount. Issue No. 3: Membership of GSM Association The applicant argued that the membership fee paid to the GSM Association should not be subject to service tax under club or association services, which have been held ultra-vires by the Gujarat High Court in the Sports Club of Gujarat Ltd. case. The Tribunal agreed, granting a complete waiver of pre-deposit for this amount. Issue No. 4: Cenvat Credit on Towers, Shelters, and Related Services The Tribunal found that the applicant did not have a prima facie case for a waiver of pre-deposit regarding Cenvat Credit on towers and shelters, referencing the larger bench decision in Tower Vision India Pvt. Ltd. However, given the extended period of limitation invoked, the Tribunal directed the applicant to pre-deposit ?65,632, which pertained to the period within the limitation. Issue No. 5: Cenvat Credit on Inputs and Input Services for Construction of Office The applicant contended that credit should be allowed for construction services used for setting up office premises. The Tribunal referenced the Bellsonica Auto Components India Pvt. Ltd. case, where the Punjab & Haryana High Court allowed such credit. Consequently, the Tribunal granted a complete waiver of pre-deposit for this amount. Issue No. 6: Cenvat Credit on Ineligible Capital Goods Like Chairs, Furniture, etc. The applicant had already reversed the credit of ?13,20,327 on these items. The Tribunal found this reversal sufficient and did not require further pre-deposit. Issue No. 7: Cenvat Credit on the Basis of Invoices in the Name of Unregistered Premises The applicant argued that there is no requirement for inputs to be received at the registered premises for availing Cenvat Credit. The Tribunal referenced several cases, including Allspheres Entertainment Pvt. Ltd. and Kenwell Biopharma Pvt. Ltd., which supported the applicant's position. Consequently, the Tribunal granted a complete waiver of pre-deposit for this amount. Conclusion: The Tribunal directed the applicant to pre-deposit ?65,632 within eight weeks and report compliance. Upon compliance, the balance amount of service tax demand, interest, and penalty would be stayed during the pendency of the appeal. The decision was pronounced in the open court on 12/05/2017.
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