9911796707
TMI Blog2022 (12) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the case, in brief, are that the appellant is registered with the Service Tax Department and is the governing body for football matches and competitions in the country. The appellant is the owner and controller of the rights relating to national teams' competitions and matches including, but not limited to the advertising rights, broadcast rights, film rights etc. An audit was conducted of the records of M/s Zee Entertainment Enterprises Pvt. Ltd. [ZEEL] during which it was found that a tripartite agreement was entered into between the appellant, ZEEL and M/s IMG Reliance Pvt. Ltd. [IMGR] It was found that the appellant had, as per an agreement with ZEEL granted commercial rights for broadcasting for a period of 10 years by an agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to art, entertainment, business, sports or marriage" under section 65 (105) (zzzzr) of the Finance Act, 1994. Accordingly, a show cause notice dated 12.04.2016 was issued to the appellant calling upon it to explain why service tax amounting to Rs. 7,53,74,401/- (including cess) should not be demanded from it under section 73 invoking extending period of limitation along with interest under section 75. Penalties were also proposed to be imposed upon the appellant. After following due process, the impugned order was passed by the Commissioner. The operative part of it is as follows. "(i) I confirm the Service Tax demand of Rs. 7,76,35,633/- (Rs. Seven crore Seventy Six Lac Thirty Five Thousand Six Hundred Thirty Three only) includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 65 (105) (zzzzr). 6. The appellant also contested the imposition of penalties. The Commissioner did not agree with the contentions of the appellant. On the question of extended period of limitation, the Commissioner observed that the appellant has not declared the amount received as termination fee in its ST-3 returns and held that even if the appellant had considered the amount as nontaxable, the amount could have been shown as non-taxable in the ST-3 returns. This has come to light only when the records of ZEEL were audited. Therefore, extended period of limitation was correctly invoked. 7. On merits, Commissioner held that ZEEL had been granted commercial rights which subsisted till the agreement was terminated by the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant, ZEEL and IMGR can be taxed and if such tax has to be paid by the appellant under the category of "permitting commercial use or exploitation of any event service" under section 65 (105) (zzzzr). 11. In order to decide this question, we need to determine if any service has been rendered by the appellant to IMGR and whether any consideration has been received for such service. The case of the Revenue is that the rights originally granted to M/s ZEEL were effectively returned to the appellant through the tripartite agreement and were transferred to IMGR. However, instead of the appellant returning an amount to ZEEL and collecting an amount from IMGR, the amount was transferred directly from IMGR to ZEEL through the tripartite a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fectively circumvented this situation by transferring the rights from ZEEL to IMGR directly with the concurrence of the appellant for a consideration known as the termination fee paid by IMGR to ZEEL. The appellant has not rendered any service in this agreement, but has concurred to the agreement whereby the rights were transferred from ZEEL to IMGR. In our considered view, such concurrence by one to the transfer of rights from A to B does not amount to rendering any service. We are also of the opinion that the amount paid by IMGR to ZEEL on behalf of the appellant cannot be considered as an amount paid to the appellant for any service. 15. In view of the above, we find that the demand is not sustainable and needs to be set aside and we do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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