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TMI Blog2007 (5) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... mposed under the provisions of section 78 of Finance Act, of Rs. 6,000 under section 76 and Rs. 200 per day under section 76 and Rs. 5,000 under section 75 of the Act along with confirmation of interest. Revenue's appeal is against Order-in-Original dated 24-11-2005 passed by Commissioner of Service Tax, dropping the proceedings raised against Board of Cricket Control in India on identical issue for the subsequent period. 2. We have heard learned advocate Shri V. Sridharan, appearing for the appellant and Shri Anil Kumar learned DR for the Revenue. Both sides have advanced extensive arguments and have also filed written submissions. 3. It is the appellant's contention that BCCI is a registered society with the main object of promotion of the game of cricket throughout India. For the said purpose, they undertake various activities like organizing test matches, one days, international and other tournaments and enters into agreement with similar organizations of other countries for holding the matches etc. During such activities, the appellant received amount from sponsorer of the tournaments/matches, by permitting putting of logo of the organization on clothing and clothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court in case of Addl CIT v. Surat Art Silk Cloth Mfrs. Association [1980] 121 ITR 11, the same still remains a charitable organization. It has been strongly contended that the surplus revenues, if any, earned by the appellant is used for the promotion of the sports and even in the case of winding up of BCCI, surplus would be transferred to another organization with similar object. Reliance was placed upon the Tribunal's decision in case of CCE v. Employ Me [2006] (4) STR 303 / 6 STT 159 (Bang. - CESTAT) (Para 6), holding that Employ Me was not a manpower recruitment agency taxable under the Act as it was not a commercial concern, even though it was collecting some fee from youth for employment. 5.2 As against above, Shri Anil Kumar learned DR appearing for the Revenue submits that the BCCI is a commercial concern, inasmuch as it is making profit out of the advertising activities undertaken by it. Merely because it is exempted from Income-tax, will not convert the same into a charitable institution and will not automatically make them exempted from Service Tax. Shri Anil Kumar in their written submission, dealt with the object of BCCI and whether the same stands f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e right to make business out of it. The sporting organizations such as BCCI/CAB which are interested in promoting the sport or sports are under an obligation to organize the sports events and can legitimately be accused of failing in their to do so. The promotion of sports also includes it popularization through all legitimate means. For this purpose, they are duty bound to select the best means and methods to reach the maximum number of listeners and viewers. Since at present, radio or TV are the most efficacious methods, thanks to the technological development, the sports organizations like BCCI/CAB will be neglecting their duty in not exploring the said media and in not employing the best means available to them to popularize the game. That while pursuing their objective of popularizing the sports by selecting the best available means of doing so, they incidentally earn some revenue, will not convert either them into commercial organizations or the right claimed by them to explore the said means, into a commercial right or interest. It must further be remembered that sporting organizations such as BCCI/CAB in the present case, have not been established only to organize the sport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... organization for controlling and promoting the cricket in India and not as an advertising agency. Ordinary meaning of the term advertising agency is an office which plans, designs and manages advertising for other companies. (Dictionary of marketing, 3rd Edition by Bloombury) (enclosed) and an organization acting as an agent for a producer of goods or services (an advertiser) devoted to the developing and placing advertising, in order to further the acceptance of a brand product, service or idea. (www.nielsenmedia.com/glosary/terms/A). Further, the same has been defined as an organization which specialized in providing services such as media selection, creative work, production and campaign planning to clients. (www.mcgraw-hill.co.uk). CBEC vide their Circular issued by F. No. 345/4/97- TRU, dated 16-8-1999, while dealing with the issue as to whether the activity of printing and publishing telephone directory, yellow pages, business directories would attract service tax under the category of advertisement has observed that the above activity would not attract service tax unless the person concerned also undertakes any activity relating to the making or preparation of an advertisem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants shall not be covered by 'taxable service' as defined in the section." 9. In view of the above guidelines laid down by Hon'ble High Court, the expression in relation to, though expansive, has to be read in context and cannot be given such a vast meaning so as to cover any activity howsoever c remotely connected, if there is some element of display or exhibition of the same. The definition has to be interpreted, in a sense appropriate to the phrase defined and to the general purpose of enactment. I.L.M Cadija Umma v. S. Don Manis Appu AIR 1939 Privy Council 63. Similarly, Hon'ble Supreme Court in case of Hariprasad Shivshankar Shukla v. A.D. Divikar AIR 1957 SC 121 held that terminating the services of all the employees on taking over railway company by Govt. of India cannot be considered as retrenchment. Inasmuch as retrenchment connotes that the business itself is being continued, but the D portion of the staff or labour is discharged as surplusage. In view of the above ordinary acceptation, the Supreme Court held that termination of services of all the workmen as a result of closure of business cannot be properly described as retrenchment. By applying the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been sold by them to the broadcasting agency and BCCI and television channel, at best, be termed as seller and buyer of rights. By taking a common example from recent time, coverage of marriage rites between celebrity couple Arun Nair and Elizabeth Hurley are reported to be exclusively sold to "Hello" magazine and similarly there are rumours of sale of "marriage function" of leading movie actor Abhishek Bachhan with Aishwarya Rai to a particular channel for broadcasting. Will such sale of performance rights coverage would convert the seller into an advertising agency, providing any services in relation to advertisement to a client. The answer is emphatic 'No'. As such, we are of the considered opinion that such sale of television /telecasting rights would not be covered by a taxable service in relation to advertisement. 12. As regards sponsorship and logo money, it has been strongly contested that the appellant is not connected, in any way, with conceptualizing, designing or preparing of advertising material of any of the sponsors and they are simply providing space either on the ground, boundaries of the ground, near club board, on trolleys used for serving soft drinks, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion as to how and in what format the advertisement should be, how it should be projected at what point of time it should be flashed in which areas it should be exhibited or the manner in which it should be drafted and exhibited has got nothing to do with the press media or electronic media. That would be the task of 'advertising agency' alone. Therefore, when we consider the situation where a client goes to the press media and asks for flashing of the advertisement and such advertisement is flashed in the media, this cannot be deemed to be a service provided by that media to such a client. Similarly, when a person approaches the electronic media and flashes an advertisement on the radio or television, as the case may be, the ratio or television simply would flash the advertisement as per instructions of the person concerned but such person will not get the advantage of the expertise of the advertising agency. Therefore, it cannot be said that the press media and electronic media provide the same service and, therefore, it cannot be complained that they should also be brought in the tax net like the advertising agencies ' (p. 204) As such, it is clear that what is bein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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