Advertising space and sponsorship were not taxable pre-01.05.2006, but ground hire for fund-raising was mandap keeper service.

Granting advertising space during cricket matches was treated as sale of space for advertisement, not advertising agency service, so the pre-01.05.2006 demand failed. Permitting sponsors' logos on players' clothing was treated as sponsorship, not business auxiliary service, and that demand also failed for the earlier period. By contrast, letting out the ground for a fund-raising event fell within mandap keeper service, so service tax and interest were payable, although penalty was not justified because the default arose from bona fide belief. The matter was remitted only for quantification of interest on the surviving liability.

---

---

Issues: (i) Whether the appellant was liable to service tax as an advertising agency for granting advertising sites and rights during cricket matches. (ii) Whether the receipts from permitting brand logos on players' clothing were taxable as business auxiliary service. (iii) Whether letting out the ground for a fund-raising event attracted mandap keeper service, and whether penalty was exigible.

Issue (i): Whether the appellant was liable to service tax as an advertising agency for granting advertising sites and rights during cricket matches.

Analysis: The activity under the instadia advertisement agreement was limited to granting the right to use advertising sites, display advertising and use advertising signs. It did not involve any service connected with the making, preparation, display or exhibition of advertisement. The activity was found to fall within sale of space for advertisement, which became taxable only from 01.05.2006. The appellant also did not answer the description of a commercial concern during the disputed period.

Conclusion: The demand under advertising agency service was not sustainable and was set aside in favour of the appellant.

Issue (ii): Whether the receipts from permitting brand logos on players' clothing were taxable as business auxiliary service.

Analysis: The arrangement only permitted display of the sponsors' logos and brand names on team clothing. This was treated as sponsorship service, not as promotion or marketing of goods or services for the client. Sponsorship became taxable only from 01.05.2006, whereas the period in dispute was earlier. The demand under this head therefore could not be sustained.

Conclusion: The demand under business auxiliary service was set aside in favour of the appellant.

Issue (iii): Whether letting out the ground for a fund-raising event attracted mandap keeper service, and whether penalty was exigible.

Analysis: The ground was let out for a fund-raising activity for consideration, which answered the statutory description of mandap keeper service. The appellant was therefore liable to pay service tax on that amount, along with interest. However, the non-collection of tax was found to have occurred under a bona fide belief, and the material did not justify penalty.

Conclusion: The demand under mandap keeper service was upheld, interest was payable, and penalty was not leviable.

Final Conclusion: The appeal succeeded on the first two demands and failed on the mandap keeper demand, with the matter remitted only for quantification of interest on that surviving liability.

Ratio Decidendi: For a pre-01.05.2006 period, granting advertising space or merely displaying sponsors' logos does not by itself constitute advertising agency or business auxiliary service, while letting out premises for an official, social or business function answers the definition of mandap keeper service.

---