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TMI Blog2018 (2) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... ch are taxable only with effect from 1.5.2006. Further, these sponsorship services are in relation to sports events and are not taxable services as laid down under section 65(105)(zzzn) of the Finance Act, 1994 - the amount received as per sponsorship agreements for boxes and stands are not leviable to tax under Sale of Space for Advertisement and requires to be set aside. Penalty - Held that: - the issue was interpretational and there was sufficient cause for not discharging the service tax liability - penalty set aside. The demand in respect of sponsorship services needs to be verified and segregated from the total demand confirmed by the adjudicating authority - appeal allowed by way of remand. - ST/237/2009 - 43025/2017 - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing aggrieved by the said demands, the appellant has preferred the said appeal. 2. On behalf of the appellant, Id counsel Shri G. Natarajan submitted that the nature of the activities carried out by the appellant would not fully fall under the alleged categories of services. The details of the category of services as well as period involved and the amount is submitted by the Id. Counsel as under:- S. No. Category of Service Period Amount 1 Sale of space for Advt. Stadia Adv. In Stadia Adv. 1.5.2006 to 30.9.2007 14,14,950/- 2. Sale of space for Adv. - sponsorsh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt' services. The department has demanded service tax on the consideration received for entering into sponsorship services with respect to stand / boxes allowed to be kept in the stadium. The Id. counsel adverted to the definition of sponsorship contained in section 65(99a) and submitted that the appellant had entered into sponsorship agreements with various customers for displaying their name and also giving the sponsor exclusive priority booking rights. That such activities being sponsorship activities, is exempted from taxable services as provided under section 65(105) (zzzn), as these activities are related to sponsorship of sports events. The Id. counsel drew our attention to various agreements entered by the appellant with custome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advertisement'. The contention of the appellants that these are only sponsorship services cannot be accepted. These boxes / stands which are constructed by the appellants in the pavilion stand as per the agreements are exclusively reserved for the customers namely M/s. Sumeru Soft P. Ltd. Indian Overseas Bank, Cognizant Technologies etc. These boxes are called sponsorship boxes and the sponsorship period runs for six years. That the said activity rendered by the appellant would fall within the sponsorship activity only if the events are sponsored in the name of the corporates. The matches were not sponsored by these corporates and they do not have any exclusive or priority booking rights, sponsoring prizes or trophies for competition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion received for providing stands / boxes inside the stadium. We have perused the sponsorship agreements produced. The said agreement shows that the boxes are to be allowed for witnessing matches only. Further, the sponsor will be permitted to have its name board on top of the box kept facing the ground. The sponsor gets the right to display his name on the top of the box only and has no right to display the product etc. They are also given exclusive or priority rights over tickets. The relevant portion of sponsorship agreement entered by the appellant with Indian Overseas Bank is reproduced as under:- 9. That not more than 15 persons would be permitted to be seated in the box at any point of time. 10. That for international match ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Sale of Space for Advertisement and requires to be set aside, which we hereby do. 11. Although the impugned order has demanded an amount of ₹ 91,38,453/- and ₹ 1,82,769/- on sale of space and time for advertisement for the period from 1.5.2006 to 30.9.2007 and education cess thereon, the Id. counsel submits that the demand can be split into four categories as given in the Table above. We do not find enough material in the impugned order to accept this contention without verification. 12. The Ida counsel has submitted that with regard to the demand made on renting of immovable property, the appellant is not contesting the demand on merits and is confining the contest on the penalty imposed. As submitted by the Id. couns ..... X X X X Extracts X X X X X X X X Extracts X X X X
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