Tribunal rules no Service Tax on IPL/ICC sponsorships. Precedents and law cited.

The Tribunal ruled in favor of the appellant, holding that no Service Tax is payable on the sponsorship of IPL and ICC cricket tournaments during the period in question. The Tribunal set aside the taxability of sponsorship services, citing precedents and statutory provisions. As the appeal succeeded on merits, the Tribunal did not address the invocation of an extended period of limitation or the imposition of penalties. The appellant was granted consequential relief in accordance with the law.

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Issues Involved:
1. Taxability of sponsorship services for cricket tournaments.
2. Invocation of extended period of limitation.
3. Imposition of penalties under Sections 77 and 78 of the Finance Act, 1994.

Summary:

Taxability of Sponsorship Services:

The main issue was whether the amount paid by the appellant towards sponsorship of cricket tournaments, namely, ICC Cricket World Cup and Indian Premier League (IPL), can be subjected to levy of Service Tax. The adjudicating authority held that the services received by the appellant under the category of "sponsorship services" were taxable. However, the appellant contended that during the period from 01.05.2006 to 31.03.2010, sports events were expressly excluded from the purview of sponsorship services under Section 65(105)(zzzn) of the Finance Act, 1994. The Tribunal found that the issue was settled in favor of the appellant in multiple decisions, including M/s. Hero Motorcorp Limited v. Commissioner of Service Tax, Delhi, which was affirmed by the Hon'ble Supreme Court. The Tribunal concluded that no Service Tax is payable on sponsorship of IPL and ICC cricket tournaments during the impugned period.

Invocation of Extended Period of Limitation:

The appellant argued that the entire demand was based on the Service Tax returns duly filed, and extended period of limitation could not be invoked. Reliance was placed on decisions such as Commissioner of Central Tax v. M/s. Zee Media Corporation Ltd. to support this argument. The Tribunal did not find it necessary to examine this issue as the appeal succeeded on merits.

Imposition of Penalties:

The appellant sought the benefit of Section 80 of the Finance Act, 1994, arguing that they were under a bona fide impression that the service provided was not liable to tax. The Tribunal, considering the appeal succeeded on merits, did not delve into the issue of penalties.

Conclusion:

The Tribunal set aside the impugned order, holding that the provisions made in the books of account by the appellant towards sharing the expenditure on account of receipt of sponsorship services could not be subjected to tax. The appeal was allowed with consequential relief as per the law.

Order Pronounced:

(Order pronounced in the open court on 23.06.2023)

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