TMI Blog2017 (6) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... n of levy of service tax liability thereon - as the services consumed outside India, therefore is no levy of service tax - appellant have made out a case of complete waiver of pre-deposit on this account. Service tax on membership fee paid to GSM Association - demand on the ground that the applicant that received club or association services from GSM Association - Held that: - The said services under club or association service have been held ultra-vires - prima facie the applicant is not liable to pay service under club or association service. Therefore, the applicant has made out a strong case for waiver of pre-deposit. Cenvat Credit on towers, shelters etc. and the services of constructions, erection and maintenance etc. of the same - extended period of limitation - Held that: - prima facie the applicant is not having a case for waiver of pre-deposit - the show cause notice has been issued by invoking the extended period of limitation, therefore, the amount of credit within the limitation of period is required to be paid by the appellant - applicant directed to make pre-deposit. Cenvat Credit on input services for construction of office - denial on the premises that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship of Mumbai IPL Team 2009-10 1,23,60,000 Sponsorship of team is not sponsorship of sports event, therefore, not covered under exclusion clause and taxable under sponsorship services. 2 Sponsorship of M/s.Otago Cricket Association 2009-10 1,05,704 Sponsorship of team is not sponsorship of sports event, therefore, not covered under exclusion clause and taxable under sponsorship services. 2 Sponsorship of IIFA awards 2010-11 1,05,12,189 Sponsorship services fall under Rule 3 (iii) of Taxation of Services (provided from outside India and received in India), Rules 2006 and appellant being recipient of service in India is liable to pay service tax under sponsorship services. 3 Membership of GSM Association 2008-9 to 2010-11 20,05,772 Club or Association Service falls Rule 3 (iii) of Taxation of Services (provided from outside India and rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed outside India and thus no liability of service tax rises thereon. The adjudicating authority confirmed has confirmed the demand of service tax on the ground that the sponsorship services received in relation to sponsorship of IIFA awards fall under Rule 3 (iii) of Taxation of Services (provided from outside India and received in India) Rules, 2006. Therefore, these services received by the applicant being located in India in relation to its business in India. 4. The contention of the learned Counsel is that is that the services provided by way of sponsorship of the IIFA awards i.e. event were organised at Macau, China, Colombo, Sri Lanka and Toronto, Canada respectively. The sponsorship services were received outside India. The sponsorship services do not have an existence separate from that of the event and it is actually the organization of the event through which the sponsorship services are rendered. The event of IIFA awards is organized outside India and therefore, when the services itself have been rendered outside India, there is no question of levy of service tax thereon. To support this, he relied on the decision of the Tribunal in the case of Cox King India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .9.2011. He submits that the issue involved is of interpretation of complex provision and the larger bench in the case of Vandana Global Ltd.-2009 (238) ELT 420 (Tri.LB) and in the case of Tower Vision India Pvt.Ltd.-2016 (42) STR 249 (Tri.-LB) has decided the issue. Therefore, it is incorrect to hold that the appellant availed credit with fraudulent intention or there is suppression on the part of the appellant. Therefore, the demand for the period April 2008 to September 2011 is barred by limitation. In that circumstance, the demand of ₹ 65,632/- can be demanded pertaining to the normal period of demand. He also relied on the decision of the Honble Gujarat High Court in the case of Mundra Ports Special Economic Zone Ltd.- 2015 (39) STR 726 (Guj.). Issue No.5. 9. With regard to the issue of credit on input and input services for construction of office, it is his submission that the credit on construction used for setting up of factory used for providing output service of leasing has been decided by Hon ble Punjab Haryana High Court in the case of Bellsonica Auto Components India P.Ltd.-2015 (STR 41 (P H) held that the credit is available on construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 (whereby the exclusionary clause was omitted) a participating team itself not being sport events, team sponsorship would fall outside the ambit of the exclusionary clause. Considering the Board circular, the adjudicating authority recorded that sponsorship of IPL is itself not sponsorship of any sport, since IPL is not an event but an entity of franchisee teams. On the same analogy, sponsorship of a team would not be sponsorship of a sports event and would therefore be taxable. 10 . In our considered view the reasons recorded by the adjudicating authority are misconceived and unsustainable. Under the agreement with GMR the appellant had sponsored (for the relevant period) the Delhi Daredevils team which was owned by GMR (under a franchise agreement with BCCI/IPL. Delhi Daredevils team was sponsored in the context of the participation of this team in the T-20 league matches. The several rights accruing to the appellant under the sponsorship agreement (adverted to above) clearly indicate that sponsorship was neither of BCCI - IPL; nor GMR, the sponsorship was clearly of the GMR owned Delhi Daredevils team in relation to participation of such team in the IPL T-20 cricket tournam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65(105)(zzzn)] (as it stood at the relevant time) reads Taxable service means any service provided or to be provided to any body corporate or firm, by any person receiving sponsorship, in relation to such sponsorship, in any manner, but does not include services in relation to sponsorship of sports events. Sponsorship is defined in Section 65(99a) of the Act and its essential ingredients are defined to include naming the events after the sponsor, display the sponsor company logo or trade name, giving the sponsor exclusive or priority booking rights, and sponsoring prizes or trophies for competition but excluding any financial or other support in the form of donations or gifts given by the donors subject to the condition that the service provider is under no obligation to provide anything in return to such donor. The agreement in issue (between GMR and the appellant) clearly constitutes sponsorship. That is also the admitted position, since that is the basis for initiation of proceedings leading to the assessment of the appellant s liability to service tax under provisions of Section 65(105)(zzzn). Since the sponsorship agreement, in our considered view falls within the exclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that Service Tax is a destination based consumption levy. The taxable event, in all events, qua the provisions of the Act, in particular provisions of Section 65, is on provisions of a taxable service. Thus, where a service is provided and consumed outside the territorial locus of the Act, the consideration received therefor would not be subject to levy of service tax, under the substantive and processual provisions of the Act. The Board Circular dated 8-10-2001, though issued as a clarification in the context of the pre-amended definition of tour operator (prior to its amendment w.e.f. 10-9-2004) is equally applicable post the amendment. This is so since our analysis on the first issue (as to the scope of the expression tour operator , post the amendment) leads to the conclusion that a composite activity, of operating a tour by a mode of transport other than in a tourist vehicle covered by a permit granted under the provisions of the Motor Vehicles Act, 1988 or the rules made thereunder, even if accompanied by services provided in the nature of planning, scheduling, organising or arranging tours (including provision of arrangements for accommodation, sightseeing or other simi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table to aspects of this taxable service which are provided and consumed outside the Indian territory must be exercised from the gross consideration received, even where the service is provided and consumed partly within India and partly without. 19. This Tribunal has held that as the services consumed outside India, therefore is no levy of service tax. 20. Further in the case of SBI Cards and Payment Services Pvt.Ltd. (supra) again this Tribunal has observed as under: 12 . Without prejudice to the above findings we find strong force in appellant s claim on service being outside the taxable territory of India. Admittedly the card transaction happened outside India. The service in respect of such transaction is rendered, received and consumed outside India. The card issuing appellant and cardholder having normal residence in India is of no consequence for tax liability on service rendered and consumed outside India. The Tribunal s decision in Cox Kings India Ltd. (supra) is applicable to the present case. The essence of taxability of service is that it should be taxed in the jurisdiction of its consumption. Here, the service, namely facility of use of card for payment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , prima facie the applicant is not having a case for waiver of pre-deposit. We find that the show cause notice has been issued by invoking the extended period of limitation, therefore, the amount of credit within the limitation of period is required to be paid by the appellant. Therefore, we direct the applicant to make pre-deposit of ₹ 65,632/- which pertained to the period within limitation within eight weeks and report compliance on _________. Issue No.5 . Cenvat Credit on input services for construction of office 24. We find that the credit has been denied on the premises that the services resulted in creation of immovable property, which is neither subjected to Excise duty nor service tax. We find that the issue came up before the Hon ble Punjab Haryana High Court in the case of Bellsonica Auto Components India Pvt.Ltd. (supra) wherein the Hon ble Hgh Court has allowed the credit on construction of office which were used for setting up of building which has further given on lease. Therefore, prima facie the applicant has been able to make out a case for complete waiver in respect of credit on construction of office premises. Issue No.6. Cenvat C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d within due time. The appellant has filed return and paid service tax along with interest before the audit of the Department. It is also stated that the appellant is a small company with paid up capital of ₹ 1,00,000/- only and the total turnover for the relevant period is only ₹ 42,70,594.65. Taking these aspects into consideration, I am of the view that the late fee imposed under Section 70 of the Finance Act can be reduced to ₹ 5,000/-. For the reason above, the penalty of ₹ 10,000/- imposed under Section 77 of the Finance Act, 1994 is set aside. 27. Further, in the case of Kenwell Biopharam Pvt.Ltd.- (supra), again this Tribunal has observed as under: 5. I have heard the learned Counsels for both the parties and perused the records. In order to decide the lis it is important to analyze the definition of input services as contained in Rule 2(l) of Cenvat Credit Rules, 2004 which is herein reproduced. input service means any service, - (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fatal to the case of the appellant as it is only a procedural violation and substantive rights cannot be denied on mere procedural violations. I also hold that the appellant cannot be denied the Cenvat credit with regard to the service tax paid on the invoices issued to the Head Office rather than the factory which has actually utilized the services so long as the inputs services are received and utilized by the appellant. This at best can only be termed as procedural violation which is not fatal to the right of the appellant. Therefore keeping in view the submissions made by both the parties and the law cited at bar, I am of the considered opinion that the impugned order is not sustainable in law and the same is set aside by allowing all the appeals of the appellant with consequential relief, if any. 28. As the applicant has taken the credit on the basis of invoices in the name of unregistered premises, therefore, the credit cannot be denied to the applicant. Therefore, the applicant has made out a case for complete waiver of pre-deposit. 29. In the result, the applicant is directed to make pre-deposit of ₹ 65,632/- within eight weeks and report compliance on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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