TaxTMI 
TaxTMI 
2017 (6) TMI 1194
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....1/04/2005 to 31/03/2010. It was alleged that the appellant have received advertising services from the service providers located outside India, namely =M/s Global Cricket Corporation PTE Ltd. for different Cricket matches/tournaments played under the aegis of ICC (International Cricket Council). Investigations were initiated, atainst them. Statement of one - Shri S. K. Bhardwaj, Deputy Manager (Commercial) was recorded wherein he has stated that the various foreign currency expenditure i.e. travelling expenses, interest, royalty, research & development, advertisement and other expenses incurred by the appellant have been booked in their books of accounts. On being enquired about the foreign currency expenditure under the head of 'Advertisement & Publicity', Shri S. K. Bhardwaj submitted that most of the payments in recent years have been made to M/s GCC PTE Ltd. in relation to a Global Partnership Agreement entered into with them. The copy of the said agreement was submitted to Revenue by Shri S. K. Bhardwaj. The Global Partnership Agreement through which M/s LGEIPL & LG AD INC, Korea were granted the Global Partner Rights collectively was entered on 28th June, 2002 between the app....
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....r to which also, the services received from outside were taxable as per the provisions of Service Tax Rules, 1994. From the perusal of the documents, account and the agreement entered with the various sports bodies located outside India for various advertisement rights and provision of brand sector products, to the host of various Cricket events to be held under the aegis of M/s ICC (Events) Ltd. from January, 2002 to May, 2007 which included the ICC World Cup, 2003 & 2007 also. Appellant had also entered into agreement with M/s ICC (Events) Ltd, Nicosia, Cyprus (hereinafter called as 'IEL') for sponsorship rights of ICC awards of 2005, 2006 & 2007 for a consideration of US$1750000. Appellant had also entered into agreement with M/s Nimbus Sport International PTE Ltd. for preparation of field logos & signage implementation and availed such services. As per the details submitted by appellant, they have made an expenditure of Rs. 31,60,88,000/- under the head of advertisement in 2006-07 and Rs. 1,57, 99,674/- in 200708. It further appeared that the payments made to M/s GCC PTE Ltd. are regarding Global Partnership Rights relating to ICC World Cup/Champions Trophy during the per....
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.... which is intended to ensure that all Global Partners receive an equal share of prime sites for television exposure; (b) Four ground level perimeter boards at all warm-up matches in the ICC Cricket World Cup 2003 & 2007, the exact size and postion of which shall be based on an equitable distribution with other Global Partners; (c) Subject to availability and on an equal basis amongst Global Partners, an option to buy further Advertising Sites in the Stadium at cost; (d) Two outfield mats (from a total of eight) at all Stadium, on which the Global Partner may display the Global Partner marks which display shall be equal in prominence with the logo of three other "Global partners" on similar mats and the layout of which shall be communicated to the Global Partner in advance. Such mats shall be of the maximum size allowed by the ICC (Events) Ltd. from time to time; (e) The Global Partner Mark shall appear exclusively on the 3rd Umpire "traffic lights" at each venue; (f) The Global Partner Mark shall appear, in rotation (min of 25% in total) with the logo of each of the other Global Partners on the sight screens at each stadium; (g) The Global Partner Marks shall appear in ....
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....e payments made to M/s GCC PTE Ltd. were on account of sponsorship and not for advertisement appeared to be untenable as the appellant - M/s LGEIPL in association with M/s LG AD INC, Korea are the Global Partner in the brand sector, comprising consumer electronics and not the sponsor as being claimed by the appellant - M/s LGEIPL & M/s LG AD INC, Korea both have been described in the opening of the agreement dated 28/06/2002. Further, clause 3.3 of the Grant of Rights was also taken notice in the Show Cause Notice, reads as follows. "The Global Partner shall have the first option to provide the Host of each Event with such Brand Sector products as it may require in relation to media centres and other Event requirements of the Host. The Global Partner shall offer such products to the Host at wholesale prices but if no arrangement can be finalized between the Host and the Global Partner on a bona fide basis then the Host shall be entitled to use the products of any Competitor and such use shall not constitute a breach of any of the provisions of this agreement provided always that the Host shall notify the Global Partner in writing of the terms finalized with such Competitor and sha....
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....similar quality, (b) such Official Sponsor or Host Licensee is able to provide such Premiums (i) of a quality reasonably acceptable to the Global Partner, (ii) in the quantities reasonably requested by the Global Partner; and (iii) in accordance with the reasonable timescale requested by the Global Partner. For the avoidance of doubt, it the Global Partner wishes to purchase Premiums in categories for which no Official Sponsor or Host Licensee has been appointed at the time of such purchases, the Global Partner will be free to source such Premium from third parties until such time as an Official Sponsor or Host Licensee in the relevant category of Premiums has been appointed or is able to meet the foregoing requirements, as the case may be, at which time the provisions of this sub-clause regarding the sourcing of Premiums will take effect, subject to existing contractual arrangements entered into by the Global Partner and any third party." 5. Further it appeared to Revenue on perusal of the rights acquired by appellant - M/s LGEIPL (The Global Partner) from the Global Cricket Corporation PTE Ltd for advertising in Cricket World Cup and other tournaments organized by the ICC, it ap....
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....0/2010 have informed that they have paid Service Tax payments made under the agreement of Marketing & Advertisement entered with M/s IDI Mauritius Ltd., but have denied to pay Service Tax on the payments made under Global Partnership Agreement with M/s GCC PTE Ltd. Accordingly on the aforementioned facts and allegations, Service Tax under the classification'advertisement agency service' was demanded amounting to Rs. 5,45,38,772/- + Cess and further the amount already paid Rs. 68,30,193/- not appropriated for the period 19/04/2006 to 31/03/2010 invoking the extended period of limitation vide Show Cause Notice dated 22/10/2010 further penalty was also proposed under Section 76, 77 & 78 of the Finance Act, 1994. 7. The Show Cause Notice was adjudicated on contest and an amount of Rs. 4,62,90,682/- was confirmed, appropriating the amount of Rs. 68,30,139/- already deposited. The reduction in the duty confirmed being for the reason that the amount relating to the period, prior to 18/04/2006, was deleted and further the cum-tax benefit was allowed. Further equal amount of penalty was imposed under Section 78 of the Finance Act, 1994 and further penalty Rs. 10,000/- was imposed und....
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....p; (ii) CCE, Thane-I v. JSW Steel Ltd. [2014 (303) E.L.T. 332], (iii) TVC Sky Shop Ltd. v. Union of India [2013 (290) E.L.T. 220 (Bom.)], (iv) Hero Honda Motors Ltd. v. CESTAT, New Delhi [2012 (281) E.L.T. 483 (Del.)], (v) Hero Honda Motors Ltd. v. CESTAT, New Delhi [2014 (303) E.L.T. 364 (Bom.)], (vi) HPCL v. Union of India [2010 (250) E.L.T. 212 (Bom.)] (vii) Aircomp Enterprise v. Union of India [2014 (305) E.L.T. 353 (Guj.] (viii) HSBC Ltd. v. CC (Adj.), Mumbai [2009 (243) E.L.T. 518 (Tri.-Mum.)] (ix) Govind Sharma v. CC, Nhava Sheva [2007 (213) E.L.T. 585 (Tri.-Mum.)] (x) Gold Plast v. CCE, Coimbatore [2003 (156) E.L.T. 524 (Tri.-Chennai)]. 6. We have considered the contentions of both sides. As regards Revenue's contention that the appeals cannot be disposed of when only stay....
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....his agreement and set out in Schedule 4 thereof'. Further, Clause 7 of the said agreement deals with the obligations of GCC towards the appellant. None of these clauses can be construed to mean that GCC has provided any advertising agency service to the appellant. Merely because there is a mention of expression 'advertising material' and the same is defined in the agreement, it cannot be said that GCC has provided advertising agency service to the appellant. Further, Schedule 4 to the said agreement deals extensively about the global partnership rights granted to the appellant by GCC. Various rights that have been granted under the global partnership rights include (i) right to use official status, (ii) advertising and promotional rights before and at each event, (iii) rights regarding the marks, (iv) rights regarding footage, photographs and player attributes, tickets and corporate hospitality etc. None of these rights constitute advertising agency service. 8. One of the contentions of Revenue is that the service rendered by GCC (and similarly others) would fall under the category of advertisement agency service because without the advice and approval of GCC, no advertisement wou....
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....he broadcasters. Admittedly, BCCI is the owner of the rights in the cricket match and by selling these rights for telecasting, no service can be said to have been provided by BCCI to any client. Taxable service, as defined in clause 105(e) of Section 65 means any service provided to a client by an advertising agency in relation to advertisement. (emphasis provided). There is no advertisement when the performance rights of the match vested in BCCI is being sold for viewership of millions of peoples and there is no client to which such service in relation to advertisement is being provided. We have examined the condition of contract entered into by the appellant with the broadcaster, which require them exhibit of the matches above 50 million homes; the telecast of opening and closing ceremonies of cricket match etc. which may be fetters by BCCI to ensure compliance by the broadcaster. At the most, the rights in the cricket match owned by BCCI can be said to have been sold by them to the broadcasting agency and BCCI and television channel, at best, be termed as seller and buyer of rights. By taking a common example from recent time, coverage of marriage rites between celebrity couples....
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....ices are being provided by the appellant in the present case. They are merely canvassing their clients to make utilize of the space available with them for the purposes of advertisement of their product during the course of matches, which are going to be telecasted and by which they can popularize their products. As such, the activities amount to sale of space and not as regards advertisement." 9. The ld. Counsel for the appellant further prays that the said judgment of this Tribunal appears to be accepted by the Revenue. Revenue has not preferred any further appeal against the said ruling in Hero Motocorp Ltd. The ld. Counsel also contends that the extended period of limitation, is not applicable in the facts and circumstances of the case, as admittedly an earlier Show Cause Notice dated 11/01/2007 has been issued on the very same facts and the very same transactions relating to the period April, 2002 to March, 2005 and as such Revenue had the knowledge, if not earlier from January, 2007 when the Show Cause Notice was issued. The demand relating to the said earlier Show Cause Notice had been set aside by this Tribunal vide Final Order No. ST/340/11 dated 06/07/2011 in Appeal No. ....