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TMI Blog2012 (5) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant under section 77 of the Finance Act. 2. After hearing both sides duly represented by Shri B.L. Narsimhan, learned Advocate appearing for the appellant and Shri K.P. Singh, learned SDR appearing for the Revenue, we find that the appellant entered into an agreement with BCCI-IPL dated 13.02.2008 and for title sponsor agreement wherein the appellant was appointed as exclusive title sponsor of the League for the Cricket IPL 20-20 matches at a consideration of Rs. 40 crores. The demand against the appellant stands confirmed on the ground that the activity of sponsoring the IPL is liable to service tax under the category of "sponsorship service" in terms of section 65 (99a) of Finance Act, 1994 read with sub-clause (zzzn) of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the definition of said service. 4. The Commissioner has observed that in terms of agreement entered into between the appellant and BCCI-IPL, League shall mean 20-20 Cricket league, which has been established by BCCI-IPL, and which it is anticipated shall take place in April-May of each year. The Company stands appointed as the exclusive title sponsor of the League for the duration of the rights period. For examining the various terms and conditions of the agreement, he has concluded that the agreement squarely stands covered by the definition of sponsorship the service for the purpose of levy of service tax. 5. As regards, the appellant's contention that the sponsorship is in relation to sports events, he has observed that the sports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tmental officers are bound to follow instructions/circular/ clarifications issued from time to time by the CBEC. He has held that the sponsorship fee paid by the noticee to the BCCI-IPL, a society registered under the Societies Act cannot be termed as sponsorship of any sports event but clearly is in the nature of obtaining sponsorship rights for being designated as exclusive "Title Sponsor of the League" by BCCI-IPL. Accordingly, he has held that the exclusion clause for sports event under sponsorship service is not available to the notice. 7. The above findings of the adjudicating authority stands contested by the appellant on the ground that the circular issued by the Board bind the officers only when they act in their administrative ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that admittedly, sponsorship of sports event, is not covered by the definition of sponsorship appearing in the relevant provisions of the Finance Act. The adjudicating authority for arriving at finding against the appellant has simpliciter followed the Board's circular reproduced above. We fully agree with the appellant's plea that the Commissioner, as independent quasi-judicial authority was under legal obligation, independently was required to examine the issue before him instead of following the Board's circulars. It is only in respect of those circulars which are in favour of the assessee that the departmental officer cannot take view against the same and are required to follow the said circulars in favour of the assessee. 11. Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity and so team sponsorship would fall outside exclusion clause or not, seems to be the subject-matter of circular. 14. We find no difficulty in the above clarification, but only to the extent that sponsoring of a team cannot be considered to be sponsorship of sport event. Admittedly when two teams, like A and B, are performing at any match, sponsorship of any one of the teams cannot be held to be sponsorship of the sport event. The difficulty lies in the second conclusive paragraph of the said instruction, where it stands observed that sponsorship of IPL in itself is not a sport event but sponsorship of franchisee teams. If IPL team is one of the teams, as observed by circular, where is other team of the match? The appellant has not prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 7. Expanding the scope of Sponsorship Service. "7.1 Business entities often associate their brand names, products or services by sponsoring popular or successful events with intent to obtain commercial benefits of spreading their name, goodwill or reputation to public. It is a form of advertisement. Sponsorship service was brought under tax net in Budget 2006. However, sponsorship of sports events was kept out of the purview of the taxation with a view to encourage sports activity and to provide an avenue for funding sports events. 7.2 Corporate involvement in certain sports such as cricket, golf and tennis has grown rapidly in the recent years and there is a substantial increase in sports events organized by private organizations or b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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