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2017 (6) TMI 1194 - AT - Service TaxReverse Charge Mechanism - import of service - Advertisement Agency Service - sponsoring sports bodies located outside India - whether the appellant-assessee, a manufacturer of Electronic & Electrical goods who have incurred expenditure in foreign exchange in sponsoring sports bodies located outside India, is liable to pay Service Tax on reverse charge basis under the classification “Advertisement Agency Service” defined under Sub-clause (e) of Clause 105 of Section 65 read with Section 65 Clause (2 & 3) of the Finance Act, 1994? Case of Revenue is also that the appeals cannot be disposed of when only stay applications were listed - Held that: - no statutory provision was brought to our notice to the effect that appeals could not be disposed of on the day when stay applications were listed even if both sides consented for final disposal of appeals themselves. Advertisement Agency Service or Sponsorship of Sporting Events? - Held that: - A perusal of the rights granted to the appellant under the sponsorship agreements reveals that these are agreements for sponsorship of various sports events and not for receiving advertising agency service - 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. What the appellant paid to various bodies abroad was the consideration for various sponsorship rights that were granted to it and not for advertising agency service. It is pertinent to note that ‘sale of space or time for advertisement and sponsorship services’ was introduced with effect from 1-5-2006 without any amendment to the definition of advertisement agency or advertising agency service and therefore in the given circumstances, it cannot be asserted that it was part of the advertisement agency service prior to 1-5-2006 and was carved out of the scope thereof. The issue contained in this appeal is squarely covered by the ruling of this Tribunal in the case of Hero Motocorp Ltd. [2015 (11) TMI 227 - CESTAT NEW DELHI], where it was held that the service received is not taxable under the head “Advertising Agency Services”. Appeal allowed - decided in favor of appellant.
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