TMI Blog2017 (6) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... ents 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 appellant M/s GCC PTE Ltd. and M/s World Sports Nimbus PTE Ltd. Further, Shri S. K. Bhardwaj informed that the expenditure booked for sponsorship of ICC Ranking ICC awards is with reference to agreement dated 22/12/2004 entered into with M/s ICC (Events) Ltd. Cyprus which was also submitted along with the copy of the party ledger for the period April, 2004 to July, 2008 as well as also the ledger copy of account with account of M/s Nimbus Sport International PTE Ltd. Shri S. K. Bhardwaj also submitted the copy of the relevant vouchers through which the payments were made. On being enquired about discharging of the Service Tax liability on such payments which has been booked by the appellant under the head of advertisement, Shri S. K. Bhardwaj submitted that no Service Tax has been paid by them on such payments. In the further statement of Shri S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails submitted by appellant, they have made an expenditure of ₹ 31,60,88,000/- under the head of advertisement in 2006-07 and ₹ 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 period 200207. The payments made to M/s ICC (Events) Ltd. are related to sponsorship of ICC awards of October, 2005, September, 2006 2007. The payments made to M/s Nimbus Sport International PTE Ltd. are related to logo signage preparation/implementation for the World Cup 2007 have been booked by appellant in their advertising expenses. All such payments made by appellant appeared to be chargeable to Service Tax under advertising services for which no Service Tax has been paid. It is further stated in the said Show Cause Notice that the appellant agreed to the liability of Service Tax on the payments made to M/s ICC (Events) Ltd. M/s Nimbus Sport International PTE Ltd. made in this regard, paid an amount of ₹ 63,35,793/- as Service Tax (including Education Cess Higher Education Cess) and ₹ 13,58, 374/- as interest towards discharge of the Servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 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 advertisement on the electronic screens at each stadium which has such facility in rotation with advertisements for the Global Partners and Official Sponsors; Details of such advertisements shall be mutually agreed subsequently by parties; (h) The Global Partner Mark shall appear, together with the logo of each of the other Global Partners and Official Sponsors, on the reverse side of all tickets to Matches and all Official Events materials; (i) The Global Partner Mark shall appear in rotation with other Global Partner and Official Sponsors on any official website for the Event and shall contain a hyperlink to the website of the Global Partner; (j) The Global Partner Mark shall be displayed, together with the logo of each of the other Global Partners and Official Sponsors on a Welcome Board located prominently by the main entrance of each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 shall grant the Global Partner a first right of refusal and give reasonable opportunity to the Global Partner to supply Brand Sector products on such terms finalized with the Competitor in question. M/s GCC PTE LTD. shall procure compliance by the Host with this clause 3.3 and, for the avoidance of doubt, any breach by M/s GCC PTE LTD. of this obligation shall be covered by the indemnity at clause 11.7. Further under the head of obligations of the Global Partner in the subject agreement dated 28/06/2002, the mention of Global Partner and Sponsor separate terms. It appeared to Revenue clearly speaks that the Sponsor and the partner are different identities. Clause 5.1.4 and 5.3.3 were taken notice of which reads as under:- Clause 5.1.4 Save as expressly set out herein, it shall not without the prior written approval of M/s GCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill 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 appeared that though the events are organized outside India, all such events were to be broadcasted live in India. The advertisements provided by appellant - M/s LGEIPL at all such venues where matches were played, were meant for viewers of television worldwide, including India, where the appellant company has noticeable presence in the electronic sector market. The facilitation from the side of GCC PTE Ltd. and World Sport Nimbus PTE Ltd., for ensuring that Global Partner receives prime sites for advertisement appears only to be with the intent of maximum television exposure to the name/products of the Global, Partner that is the appellant. Further, appellant- M/s LGEIPL had also acquired exclusive rights for advertisement at the prominent places at the venues, which get maximum coverage in television live telecast such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed, appropriating the amount of ₹ 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 ₹ 10,000/- was imposed under Section 77 of the Finance Act, 1994. 8. Being aggrieved the appellant is in appeal before this Tribunal. The ld. Counsel for the appellant urges that the issue is no longer res-integra and the same have been considered and decided in favour of the appellant-assessee by a Coordinate Bench of this Tribunal in the case of Hero Motocorp Ltd. Versus Commissioner of Service Tax, Delhi reported at 2016 [42] S.T.R. 702 equal to MANU/CE/0886/2015 wherein vide Final Order dated 9/06/2015, under similar facts and circumstances, where Hero Motocorp manufacturer of motorcycles entered into agreements with various sports bodies located abroad not having office in India like Global Cricket Corporation Pvt. Ltd. (GCC), World Sports Nimbus Pvt. Ltd. (WSN), International Hockey Federation (IHF), World Sports Group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be disposed of when only stay applications were listed, 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. None of the judgments cited by Revenue in this regard lay down any such principle. For example, High Court judgment in the case of CCE v. Mahindra Mahindra (supra) only observed that final disposal of appeal by a cryptic order at the stage of consideration of stay application was unsatisfactory. CESTAT judgment in the case of HSBC Ltd. v. CC (Adj.), Mumbai (supra) cited by Revenue involved a situation where the consent of Departmental Representative was not obtained for disposing of the appeal itself. 7. As the issue involved in this case is whether the service received by the appellant under various agreements fell under advertising agency service, it is useful to reproduce the definition of Advertisement and Advertising Agency Service given in the Finance Act, 1994 :- Section 65(2) Advertisement includes any notice, circular, label, wrapper, document, hoarding or any other audio or visual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the advice and approval of GCC, no advertisement would be displayed. As per 5.2(a) of the agreement with GCC (reproduced above), GCC was to endeavour to advice the Global Partner whether or not such advertising materials have been approved within ten working days of receipt of the same. Thus, it was the advice in the nature of intimating whether the approval has been granted. It was not an advice connected with making, preparation, display or exhibition of the advertisement. Thus, 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. 9.?As stated by the appellant, the service rendered by sports bodies abroad could possibly be covered under the head of Sale of Space or Time for Advertisement and Sponsorship Services , which became taxable with effect from 1-7-2006. However, taxable services in relation to sponsorship services specifically excluded sponsorship of sport events. In this regard, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime, coverage of marriage rites between celebrity couples Arun Nair and Elizabeth Hurley are reported to be exclusively sold to Hello magazine and similarly there are rumours of sale of marriage function of leading movie actor Abhishek Bachchan with Aishwarya Rai to a particular channel for broadcasting. Will such sale of performance rights coverage would convert the seller into an advertising agency, providing any service in relation to advertisement to a client. The answer is emphatic No . As such, we are of the considered opinion that such sale of television/telecasting rights would not be covered by a taxable service in relation to advertisement. 12. As regards sponsorship and logo money, it has been strongly contested that the appellant is not connected, in any way, with conceptualizing, designing or preparing of advertising material of any of the sponsors and they are simply providing space either on the ground, boundaries of the ground, near club board, on trolleys used for serving soft drinks, the front side of the tickets and passes used for matches. As such, providing of space, without any connection with the work relating to the designing or preparation of adve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide Final Order No. ST/340/11 dated 06/07/2011 in Appeal No. ST/111/2008, following the ruling of the Apex Court in the case of Indian National Ship Owners Association Versus Union of India reported at 2009 (13) STR 235, held that no demand can be raised on reverse charge basis prior to the period 18/04/2006. 10. Heard the ld. A. R. for Revenue who has relied on the impugned order and prays for dismissing the appeal. 11. Having considered the rival contentions and on perusal of the facts on record, we are satisfied that the issue contained in this appeal is squarely covered by the ruling of this Tribunal in the case of Hero Motocorp Ltd. (supra) on all four. We notice that the very same nature of agreement with the same M/s GCC PTE Ltd. had been entered into by Hero Motocorp Ltd. and other world sports bodies, as in the case of the present appellant and after examining the issues and details this Tribunal held that the service received is not taxable under the head Advertising Agency Services. Accordingly, we allow this appeal on merits, setting aside the impugned order. The appellant will be entitled for consequential benefits, if any, in accordance with law. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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