2012 (11) TMI 403 - AT - Service Tax

Tribunal upholds service tax levy on selling ads, directs pre-deposit for appeal

Rajasthan Cricket Association Versus Commissioner of Central Excise, Jaipur

Rajasthan Cricket Association Versus Commissioner of Central Excise, Jaipur - [2012] 36 STT 463 (NEWDELHI - CESTAT) Issues:1. Whether the appellant is liable to pay service tax under Section 65(105)(zzzm) for selling advertisement spaceRs.2. Whether the activity carried out by the appellant can be considered a serviceRs.3. Whether the appellant is eligible for input service credit if the activity is held to be taxableRs.Analysis:Issue 1: Liability to Pay Service TaxThe Appellate Tribunal considered the case where the appellant, a cricket association, allowed parties to advertise in the stadium during matches and collected charges for the same. The Revenue argued that the appellant should have paid service tax under Section 65(105)(zzzm) for the sale of advertisement space. The Tribunal found that prima facie, service tax is leviable on the selling of space for advertisement by the appellant. Consequently, the appellant was directed to pre-deposit an amount of Rs. 21,50,000 for the admission of the appeal, with the balance dues waived during the appeal's pendency.Issue 2: Nature of ActivityThe Counsel for the Appellant contended that the association operated on a no-profit-no-loss basis, and therefore, the activity carried out by them should not be considered a service. However, the Tribunal did not accept this argument and held that the impugned activity falls under the purview of Section 65(105)(zzzm), justifying the levy of service tax on the appellant.Issue 3: Eligibility for Input Service CreditThe Appellant's Counsel asserted that if the activity is deemed taxable, the appellant should be eligible for input service credit amounting to approximately Rs. 21 lakhs. They also mentioned their intent to provide supporting documents for this claim at a later stage. The Tribunal did not delve deeply into this aspect in the current judgment but directed the appellant to make the pre-deposit as ordered.In conclusion, the Tribunal upheld the levy of service tax on the appellant for selling advertisement space under Section 65(105)(zzzm) despite the appellant's arguments regarding the nature of their activities. The decision required the appellant to make a pre-deposit for the admission of the appeal, with the balance dues waived during the appeal process. Compliance was to be reported on a specified date.