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TMI Blog2017 (6) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... de 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip of GSM Association 2008-9 to 2010-11 20,05,772 Club or Association Service falls Rule 3 (iii) of Taxation of Services (provided from outside India and received in India) Rules, 2006 and Appellant being allowed to use the trademark 'GSM' as GSM operator in India is liable to pay service tax in India under club or association service. 4 CCR of Towers and tower parts and services for construction of towers and shelters. 2008-09 to 30.9.2011 1,96,69,116 Towers/structure are immovable and hence not goods. Towers/structures and parts thereof are neither capital goods nor inputs. Constructed immovable property is neither subject to excise duty nor service tax and as such the input services used for construction of immovable property cannot be treated as input service for providing output service. 5 CCR of inputs and input services for construction of office 2009-10 to 2010-11 17,00,721 Cement, angles and channels used for construction of office premises and these cannot be said to be used for providing output service. 6 CCR of ineligible CGs like chairs, furniture etc. 2008-09 to 30.9.2011 13,20,327 These are not capital goods covered under Rule 2 (a) of Cenvat Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007 (7) STR 443 (Tri. Ahmd) Issue No.3. 5. For the membership fee paid to the GSM association, the contention of the learned Counsel is that the adjudicating authority has confirmed the demand of service tax under club or association services from GSM Association and the services rendered by club or association has been held ultra-vires by the Hon'ble Gujarat High Court in the case of Sports Club of Gujarat Ltd. vs. Union of India-2013-TIOL-528-HC-AHM-ST. Therefore, he submits that the service tax is not payable on this count. Issue No.4. 6. Learned Counsel for the appellant submits that they are entitled to avail credit in respect of towers, shelters etc. and the services of construction, erection and maintenance of the same. He submits that as per Rule 2 (k) of the Cenvat Credit Rules, 2004, they are eligible to avail credit as input for providing output service, such item should be goods other than diesel oil, high speed diesel oil, motor spirit known as petro and motor vehicles and such items must be used for providing any output service. He submits that the term all goods mentioned in Rule 2(k) (ii) would cover all the goods used for providing any output service except t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises, he submits that there is no condition that the input should be received in the premises of the provider of the output service and Rule 3 provides that cenvat credit can be availed when the inputs and capital goods are received in the factory. However, similar restriction does not exist as regards the provisions of availing cenvat credit on input services. 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 and the other requirement of Rule 9 have been met. To support this, he has relied on the following decisions: (a) Allspheres Entertainment Pvt.Ltd.-2016 (41) STR 104 (T) (b) Kenwell Biopharam Pvt.Ltd.-2017 (47) STR 70 (T) (c) Toll (I) Logistics Pvt.Ltd.-2016 (41) STR 80 (T) (d) Imagination Technologies India Ltd.-2011 (23) STR 661 (T). 12. He prayed that the requirement of pre-deposit of service tax, cenvat credit, penalty and interest may be waived. 13. On the other hand, learned AR supported the impugned order and submits that with regard to the sponsorship service of IIFA are token place outside India, but the applicant got the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnament. 11. The sponsorship agreement is in our considered view a clear commercial transaction, the underlying purpose being the assumption that since BCCI-IPL-T-20 matches generate huge public viewership, either directly at the venues or through audio visual and print media as well, the appellant's association with the T-20 sports event through Delhi Daredevils team would showcase the appellant's presence in its core business as a manufacturer of two wheeler motorbikes. It is neither the case of the adjudicating authority as revealed in the adjudication order nor the case of Revenue before this Tribunal that the sponsorship agreement was entered into with GMR either to sponsor GMR or to sponsor BCCI/IPL without reference to the T-20 fixtures. We are not persuaded by any material on record that a huge amount of ₹ 4,80,00,000/- (for three years) was expended by appellant for deriving any commercial benefit out of its association with either GMR or BCCI/IPL alone. We are also not persuaded to infer that GMR and/or BCCI-IPL by themselves and unrelated to the T-20 cricket tournament/event would have any audience/viewership interest or footfall as to have any commercial utility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iveness which might both have a direct significance as well as indirect significance depending on the context. The Supreme Court explained that the said expression connotes "concerning that" and "pertaining to", are expressions of expansion and not contraction. 17. The said issue was considered by this Tribunal in the case of Hero Honda Motors Ltd (supra) held that the assessee is not liable to service tax for sponsorship service. Therefore, 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/-. Therefore, complete waiver is granted on that account. Issue No.2. Sponsorship of IIFA awards: 18. We find that the adjudicating authority confirmed has confirmed the demand of service tax on the ground that the sponsorship services received in relation to sponsorship of IIFA awards fall under Rule 3 (iii) of Taxation of Services (provided from outside India and received in India) Rules, 2006. In fact the services provided by way of sponsorship of the IIFA awards i.e. event w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedents i.e. Ahmedbhai Umarbhai & Co. and Ishikawajma-Harima Heavy Indus. Ltd., it is clear that even composite transactions involving a raft of apparently taxable services are susceptible and ought to be, vivisected, to ascertain which of the services or components thereof fall within the ambit of the Act and which services fall outside such ambit. As services provided for outbound tours are provided and consumed outside the Indian territory; are beyond the province and purview of the provisions of the Act, the consideration received which corresponds and is relatable to services provided outside the Indian territory require to be excised by applying the doctrine of apportionment. On such vivisection, the consideration attributable to services provided outside the Indian territory must be excluded, as this is not subject to levy and collection of Service Tax, under provisions of the Act. This conclusion is also the logical corollary of the non-derogable premise that Service Tax is not a tax on the pursuit of the profession of providing a taxable service but is a tax on the provision of a taxable service, a destination based consumption tax. (k) The fundamental fallacy in the subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) S.T.R. 3 (S.C.) held that in respect of offshore services, there should be sufficient nexus between the rendition of services and territorial limits of India. It was held that applying the principle of apportionment to composite transactions which have some operation in one territory and same in other, it is essential to determine taxability of the service operations. Applying this principle, we find even if alternate argument of Revenue is considered, in the present case the whole of service rendered and consumed outside India is beyond the taxable territory as per Finance Act, 1994. 21. As sponsorship service has been consumed outside India, therefore, prima facie we are of the view that the applicant is not required to pay service tax under this category and have made out a case of complete waiver of pre-deposit on this account. Issue No.3. Service tax on membership fee paid to GSM Association: 22. We find that the applicant has acquired membership of GSM Association, Geneva whereby it has received the royalty free licence to use trademarks 'GSM' owned by the GSM Association. The service tax has been confirmed on the applicant on the ground that the applicant that receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides that cenvat credit can be availed when the inputs and capital goods are received in the factory. However, similar restriction does not exist as regards the provisions of availing cenvat credit on input services. 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. We find that similar issue came up before the Tribunal in the case of Allspheres Entertainment Pvt.Ltd. (supra) wherein this Tribunal observed as under: 5. In the show cause notice, there is no allegation that the input services were not received/utilized by the appellant. So also there is no dispute that such input services were not properly accounted. In the absence of any such dispute regarding availment of services and their utilization for payment of service tax or proper accounting of the same, the denial of Cenvat credit of service tax paid by Nainital office of the appellant on the sole ground that the invoices issued are in the name of the appellants unregistered office at Delhi is unjustified. The head office wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outward transportation up to the place of removal." Reading of the definition of 'input service' as provided above it includes all the services which are rendered in relation to setting up of the business and all activities relating to business which is wide enough to include all the services involved in this case. Learned Counsel for the applicant also clarified that each and every services involved in this case is related to the business directly or indirectly and therefore qualify as 'input service' under the inclusive definition of 'input services' under Rule 2(l) of Cenvat Credit Rules, 2004. On perusal of the records I found that the various input services involved in the present case are related to the business of the appellant. As far as Customs House Agent Services are concerned, I find that these services are used for export of finished goods and therefore they qualify as 'input service' and the service tax paid on CHA services are eligible as Cenvat credit as held in CCE, Mysore v. Chamundi Textiles Ltd. reported in 2010 (258) E.L.T. 141 (Tri.-Bang.) = 2010 (20) S.T.R. 219 (Tribunal) and CCE, Rajkot v. Rolex Rings Pvt. Ltd. reported in 2008 (230) E.L.T. 569 (Tri.-Ahmd.) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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