Custom, Excise & Service Tax Tribunal
Ms Ritnand Balved Education Foundation vs Ce & Cgst Noida on 16 October, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.70297 of 2019
(Arising out of Order-in-Appeal No.NOI-EXCUS-001-APP-1561-18-19, dated -
12/10/2018 passed by Commissioner (Appeals) CGST, Noida)
M/s Ritnand Balved Education Foundation .....Appellant
(Amity University Campus
Sector-125, Noida, U.P. 201303)
VERSUS
Commissioner, Central Goods & Service Tax, Noida
....Respondent
(C-56/42, Renu Tower Sector 62, Noida-201301) APPEARANCE:
Shri Atul Gupta, Advocate for the Appellant Shri Santosh Kumar, Authorized Representative for the Respondent CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.-70756/2024 DATE OF HEARING : 16.10.2024 DATE OF DECISION : 16.10.2024 SANJIV SRIVASTAVA:
This appeal is directed against the Order-In-Appeal No. NOI-EXCUS-001-APP-1561-18-19, dated -12/10/2018 passed by Commissioner (Appeals) CGST, Noida. By the impugned order following has been held:-
"4. I have gone through the case records, submissions made by the appellant, record of personal hearing and citations relied upon by the appellant/advocate, carefully. The issues to be decided in the present appeal are as follows:- (A) Whether the instant proceedings has been initiated against wrong person; (B) Whether sponsorship pertaining to sports event like CG2010 was taxable
2 Service Tax Appeal No.70297 of 2019 under service tax at the time of provision of Impugned 'sponsorship service by ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 to the appellant; (C) Whether liability of service tax under RCM can be sustained against the appellant as they are neither a body corporate ner a firm, as claimed by the appellant; (D) Whether value of sponsorship service should be taken as Rs. 30.06 lakhs equivalent to cost of imparting training to the games workforce by the appellant; (E) Whether value of service should be treated as cum-tax; (F) Whether extended period of I have gone through the case records, submissions made by the appellant, record of personal hearing and citations relied upon by the appellant/advocate, carefully. The issues to be decided in the present appeal are as follows:- (A) Whether the instant proceedings has been initiated against wrong person; (B) Whether sponsorship pertaining to sports event like CG2010 was taxable under service tax at the time of provision of Impugned 'sponsorship service by ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 to the appellant; (C) Whether liability of service tax under RCM can be sustained against the appellant as they are neither a body corporate ner a firm, as claimed by the appellant; (D) Whether value of sponsorship service should be taken as Rs. 30.06 lakhs equivalent to cost of imparting training to the games workforce by the appellant; (E) Whether value of service should be treated as cum-tax; (F) Whether extended period of limitation is Invokable In the Instant demand; (G) Whether provisions of Sec 60 of the Act is applicable for waiver of penalty)
5. From the copy of the letter dated 22/03/2010 issued by the appellant to ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 as available the case records, I notice that at the time of submission of their proposal to be official sponsor and trainer to CG2010, they, for the first time, declared that they had formed a consortium of international organizations with proven track record in multi sporting events and requested the ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 to grant the sponsorship right to them. I further find that vide approval letter dated 05/04/2010, ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 had informed the appellant that the sponsorship approval committee (SAC) had approved the sponsorship offer of the Amity University Consortium along with permission to use co-branded logo of the CG2010. However, I find that not a single evidence is available in file regarding formation 3 Service Tax Appeal No.70297 of 2019 and activity of the so- called consortium which invalidates the very existence of such consortium. In general terms, a consortium is an association of two or more individuals, companies, organizations or governments (or any combination of these entities) with the objective of participating in a common activity or pooling their resources for achieving a common goal. Each participant retains its separate legal status and the consortium's control over each participant is generally limited to activities Involving the joint endeavor, particularly the division of profits. A consortium is formed by contract, which delineates the rights and obligations of each member. However, no such contract of consortium or any other document in evidence is available on record in support of the appellant's claim that the sponsorship right was granted to and executed by the so-called consortium. On the contrary, it is on record that all the correspondence exchanged in this regard between the ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 and the appellant at the time of execution of the training project were without any reference of the consortium. I find that till date, the name of the appellant, i.e., 'AMITY UNIVERSITY is being distinctly shown as co-sponsor in the homepage of the official website of CG2010 <http://d2010.thecgf.com> which proves beyond doubt that the right of such sponsorship was granted to the appellant exclusively and benefit of such sponsorship was availed and utilized by the appellant alone for promoting their brand image and brand value bypassing such non-existing consortium. I also find no reasonable answer to the obvious question as to why such other members of so-called consortium having foreign origin would be interested to sponsor the CG2010 on the back of the fact that they had no declared activity in this region which required brand promotion and also nowhere their company logo or brand/trade name was displayed during CG2010 in order to achieve any benefit from such sponsorship. From the facts and circumstances discussed above, I find that no such consortium was in existence at the material time and the appellant had apparently indicated their names in their proposal letter only to inflate their credentials and also to fulfill the mandatory preconditions in order to grab the sponsorship right and to avail the huge benefits of such sponsorship of such prestigious mega event, I.e., CG2010. So, I find that the claim of the appellant in this regard is baseless and the sponsorship was granted to the appellant alone and liability of service tax, if any leviable for the sponsorship services, provided by the ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 , is on the 4 Service Tax Appeal No.70297 of 2019 appellant under RCM as the sole recipient of such service. Accordingly, I hold that the proceedings under the impugned SCN have been correctly Initiated against the appellant.
6. I find that vide Finance Act 2010, w.e.f. 01/07/2010, certain changes have been made in taxing provisions relating to 'sponsorship services' as follows:-
Position upto 30-06-2010:- (1) Service provided to only body corporate or firm was covered;
(2) Sponsorship relating to sports events was not taxable;
Position after 01-07-2010:- (1) Service provided to any other person is covered;
(2) Sports events are taxable with some exemptions to specified tournaments or championships (CG2010 not exempted);
7. In the grounds of appeal, the appellant have pleaded that the impugned sponsorship service was provided by the ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 and received by the appellant on the date of approval of the sponsorship in favour of them by the ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 , I.e. on 05/04/2010, which is prior to the amendment of Act effective from 01/07/2010. It is also contended therein that no liability to pay service tax on sponsorship service under RCM can be sustained against them/consortium as they are neither body corporate nor firm. To examine their claim, I hereby refer the definition of 'sponsorship' as provided in Section 65(99a) of the Act, which is as follows "sponsorship" Includes naming an event after the sponsor, displaying the sponsor's company logo or trading name, giving the sponsor exclusive or priority booking rights, sponsoring prizes or trophies for competition; but does not include ** ". From the definition, it is clear that formal approval of sponsorship in favour of any person does not create any taxable event or perform any rendering of service unless the specific activities defined under the Act are in point of fact performed by the service provider in order to make available the benefits of sponsorship to recipients of such service, i.e., the sponsors. At the material period when Rule 5B of Service Tax Rules, 1994, Section 67A of Finance Act, 1994 and Point of Taxation Rules, 2011 were not in effect, it was settled law that taxable event for service tax was rendition of service and rate of tax applicable was the one on date on which services were rendered and not the date on which agreement/approval/contract for service was made. I notice that the CG2010 vas held in Delhi from 03/10/2010 to 14/10/2010 and 5 Service Tax Appeal No.70297 of 2019 all the activities related to provision of sponsorship service have been undertaken by the ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 , viz., naming an event after the sponsor, displaying the sponsor's company logo or trading name, giving the sponsor exclusive or priority booking rights, sponsoring prizes or trophies for competition etc. in order to pass on the sponsorship benefits to the sponsors only at the time or immediately before the event, in any way not before 01/07/2010 and hence the taxable event was occurred after amendment of Finance Act 1994 w.e.f. 01/07/2010.
8. As discussed in the previous para, I opine that, in the instant case, amended provisions of Act as effective form 01/07/2010 for levy of service tax on sponsorship service received by the appellant from ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 are applicable for assessment of service tax payable by them under RCM. Accordingly, I hold that during the period of rendering taxable sponsorship service by OCCWO to the seppeliant, service provided to any person was covered and exclusion of sports sponsorship was removed and appellent's contention for sponsorship of sports event and/or not being a body corporate or firm makes no difference and proposal of levy of service tax on gross value of service was correct as per provisions of Service Tax Law, Rules and procedures thereof.
9. However, it is worth mentioning here that as per provisions of Rule 2(1)(d) (C) of the Service Tax Rules 1994 as amended, 'the person liable for paying service tax in relation to service provided by way of sponsorship to anybody corporate or partnership firm located in the taxable territory has been defined as the recipient of such service and this Rule has not been amended at the time of amendment of Act in the year 2010. From plain reading of the above, it is found that RCM is applicable only in cases where sponsorship service has been provided to anybody corporate or partnership firm and in all other cases, service provider is liable to pay service tax on forward charge basis. In other word, legal identity of the recipient is relevant for application of RCM for assessment of service tax on sponsorship service at the relevant period. Here, I rely on "The Amity University Uttar Pradesh Act 2005 [U.P. Act No. 11 of 2005] [Ref:
http://www.lawsofindia.org/pdf/uttarpradesh/2005/2005UP11.pdf) passed by the Uttar Pradesh Legislature on 24/03/2005 to establish and incorporate the Amity University wherein Section 3(2) of the said Act has clearly laid down that the Amity University Uttar Pradesh shall be a 'body corporate'. I find that this provisions 6 Service Tax Appeal No.70297 of 2019 of the Amity University Uttar Pradesh Act 2005 clearly negates all the defence submissions along with case laws relied upon by the appellant and establishes that being a 'body corporate' as stipulated in a State Act, they cannot escape applicability of RCM in their case for levy and assessment of service tax payable for receiving sponsorship service from ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 during the material period.
10. Relating to valuation of taxable service, the appellant have contended that the value of the said services should be limited to Rs. 30,06,871.00 on which they have already paid service tax. In support of their claim, they have submitted a statement of expenditures stated to be made for imparting the training of Games Workforce consisting of various items like cost of faculty, catering, transportation, training materials, consumables etc. They have also submitted copies of some correspondences made with OCCGW, long after the CG2010 is completed, proposing adjustment of revenue generated as per actual cost of training project. However, from the case records, I find that at the time of submitting proposal for official sponsor and trainer to CG2010, they have Indicated therein that this huge job of giving specialized and customized games time training to more than 30000 work- force at no cost basis would cost them more than Rs. 15 Crore and after realistic negotiations, the VIK of Rs. 5.00 Crore has been agreed and approved by the high power sponsor committee of CG2010 as evident in copy of resolution. As per completion certificate submitted by the appellant to ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 on 01/10/2010, it is clearly Indicated therein that they have successfully completed their assigned job of giving training to 30000 games workforce within stipulated timeframe and I find no logic in lowering the value of service from pre-agreed VIK of Rs. 5.00 Crore to mere Rs. 30.00 lakh equivalent to projected cost of training of games workforce as submitted by the appellant. I also find that the figure of Rs. 30.00 lakh is appeared to be grossly undervalued owing to the fact that 30000 nos. [i.e., Rs. 100/- per person) of workforce have been trained by the appellant specifically for the games purpose, which also includes catering and transportation of trainees apart from Imparting training to them.
11. I hereby rely upon the provisions of Section 67(1)(ii) of the Finance Act 1994 wherein it has been provided that where service tax is chargeable on any taxable service with reference to its value, then such value shall, in a case where the provision of service is for a consideration not wholly or partly consisting of 7 Service Tax Appeal No.70297 of 2019 money, be such amount in money as, with the addition of service tax charged, is equivalent to the consideration. Further reliance is also placed on provisions of Rule 3(a) of the Service Tax (Determination of Value) 2006, wherein it has been prescribed that the value of taxable service, where such value is not ascertainable, shall be determined by the service provider equivalent to the gross amount charged by the service provider to provide similar service to any other person in the ordinary course of trace and the gross amount charged is the sole consideration. I find from the case records that sponsorship amount of Rs. 18 Crore to Rs. 50 Crore (in cash and also VIK) have been charged to and realized from other companies having same status of co-sponsors like Coca- Cola, Reebok, Agility Logistics etc. by ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 against providing such sponsorship services to them. On application of spirit of provisions of law as laid down in Section 67(1)(ii) of the Finance Act 1994 read with Rule 3(a) of the Service Tax (Determination of Value) 2006 for determination of value of service on the basis of gross amount charged by the service provider to provide similar service to any other person in the ordinary course of trade when such provision of service is for a consideration not consisting of money, I hereby determine the value of service for the purpose of levy and assessment of service tax in the instant case is Rs. 5.00 Crore (VIK) as mutually agreed between the service provider (ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 ) and the recipient (Appellant) at the time of awarding sponsorship right of CG2010 to the appellant rejecting appellant's claim for determination of lower taxable value on the basis of projected cost of training or proposal of paper adjustment of revenue generation long after the event.
12. The appellant have also pleaded that they have paid appropriate service tax on such amount of Rs. 30.00 lakhs and no further tax is payable. I find from the copy of e-payment challan submitted in this regard that Rs. 9,88,087/- has been paid on 31/03/2011 under the service category 'commercial training or coaching', which is their main output service. Interestingly, it is to be noted here that in one hand they are claiming that they have spent Rs. 30.00 lakh in course of imparting training to games workforce and on the other hand they are claiming that they have paid service tax through e-challan on that amount spent by them even when 'commercial training or coaching' service was not taxable under RCM. Accordingly, I hereby take note that this clear misstatement, claiming payment of tax against present demand 8 Service Tax Appeal No.70297 of 2019 through the e-payment challan which has already been appropriated/adjusted against their usual liability, has been made by the appellant as a feeble effort to misguide the appellate authority to the wrong way and hold that no tax is so far paid by the appellant against the demand.
13. The appellant have also claimed cum-tax benefit for calculation of service tax payable in the instant case. However, I find that in the reverse charge mechanism (RCM), the provider of service is no way liable for payment of service tax and accordingly not required/authorized to realized the service tax component along with the gross value of service from the recipient. Accordingly, I hereby reject the appellant's claim for cum-tax benefit in the instant case.
14. I also find that, in spite of being a "body corporate' specified in the Sharda University Act 2009 [U.P. Act No. 11 of 2005]' passed by the Uttar Pradesh Legislature on 24/03/2005, engaged in lucrative business of running a private university, the appellant all along pretended as a charitable education trust taking the shield of the sponsoring body 'Ritnand Balved Education Foundation" in order to escape the liability of payment of service tax under RCM as recipient of sponsorship service. I further find that appellant's argument for bonafide belief or reasonable cause or ignorance of law behind their act of non-payment of service tax under RCM is not at all acceptable on the background of fact that the appellant is running a well established university which used to offer various courses of law education and all the information regarding his legal status is available in his own official website. Hence, I opine that the adjudicating authority correctly held that the appellant suppressed the facts and contravened provisions of the Act and Rules made there-under with an intent to evade payment of service tax and confirmed extended period of demand under proviso to section 73(1) of the Act and also correctly imposed penalties U/S 76, 77 and 78 of the Act.
15. In view of above discussion and findings, I reject the appeal по. 1165/ST/Noida/APPL/NOI/2017-18 dated 01/08/2017 filed by the appellant M/s. Ritnand Balved Education Foundation [Amity University or Amity Institute of Training & Development (AITD)], Amity University Campus, Sector-125, Noida."
9 Service Tax Appeal No.70297 of 2019 2.1 The Appellant is registered with the service tax Authorities for providing taxable services for the category of 'Commercial Coaching & Training Services'. On the basis of inter- departmental information, enquiry was initiated against the Amity University regarding services provided by/to them by the Organizing Committee of Commonwealth Games 2010 by way of imparting training of volunteers and sponsorship. The enquiry was viz-a-viz the actual value of expenditure incurred towards sponsorship as there was a difference in the sponsorship value intimated by the ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 and that claimed by the Amity University.
2.2 On inquiry and scrutiny of the documents it was found that:-
(a) that the bids were invited by the ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 for appointment of training agency/agencies for Games-Time Training
(b) that Amity University participated in the aforesaid bid
(c) that Amity University offered to become the sponsor as well as the official trainer for training of Games Work Force
(d) that the Amity University formed a consortium for the said assignment
(e) that the Tender Opening Evaluation Committee for the Appointment of Training Agency/ Agencies for the Games declared the party eligible to be the official sponsor for the Game Time Training and could be awarded the contract for the Games Training Sponsorship
(f) that ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 intended for written agreement with the party but the latter defaulted in compliance
(g) that ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 confirmed the value of the party's proposal as 10 Service Tax Appeal No.70297 of 2019 Rs. 5 Crores and also confirmed that the party (AITD) to be a "Co-Sponsor" level Sponsor of D2010 Games
(h) that ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 granted permission to the party to use D2010 Games Logo
(i) that Shri Aashish Bindra's submissions that RBEF had not obtained any sponsorship from ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 is in contradiction with the facts narrated above
(i) that the party has obtained the sponsorship services as co-sponsor and official trainer for the Commonwealth Games 2010.
2.3. Thus Revenue was of the view that Appellant has availed sponsorship rights under the category of Co-sponsor and were liable for service tax under the category of Sponsorship Service. In lieu of the provisions of Sponsorship service Appellant had imparted training programme to the volunteers of the Commonwealth Games, 2010 which was evaluated to Rs. 5 crore by Organizing Committee of Commonwealth Games, 2010 and this evaluated service value of training programme should be taken as consideration against sponsorship service availed by the Appellant.
2.4 After completion of the inquiry/investigation a Show Cause Notice dated 21.08.2015 was issued to the Appellant asking them to show cause as to why:-
" a) Service Tax (including Education Cess and SHE Cess) amounting to Rs.51,50,000.00 (Rupees Fifty One Lacs Fifty Thousand only), demanded and recovered from them under proviso to Section 73(1) of Finance Act 1994,
b) interest under Section 75 of the Act ibid on the aforesaid amount should not be demanded,
c) penalty should not be imposed upon them under Section 78 of the Act ibid for the contravention of various provisions 11 Service Tax Appeal No.70297 of 2019 of the Finance Act, 1994 and the Service Tax Rules, 1994 as discussed supra.
d) Penalty should not be imposed upon them under section 77 of the Act for violation of Section 69 read with Rule 4 of the Rules in case of non-registration.
e) Penalty should not be imposed upon them under section 77 of the Act for violation of Section 70 of the Act read with Rule 7 of the Rules improper submission of ST-3 return."
2.5 This Show Cause Notice have been adjudicated by the Additional Commissioner vide Order dated 12.10.2018 holding as follows:-
1) I confirm Service Tax demand amounting to Rs.51,50,000/- (Rupees Fifty One Lacs Fifty Thousand only) under Section 73(2) of the Finance Act, 1994 and order it to be recovered from them, along with applicable Interest under Section 75 of the Finance Act, 1994 as amended.
2) I impose penalty of Rs.51,50,000/- (Rupees Fifty One Lacs Fifty Thousand only) under Section 78 of the Finance Act, 1994 as they have willfully and deliberately suppressed the facts of not discharging due service tax & order it to be recovered from them.
3) I also impose penalty of Rs.10,000/- (Rupees Ten Thousand only) under Section 77 of the Finance Act, 1994 for violation of Section 69 read with Rule 4 of the Service Tax Rules 1994 for non-registration of the party within prescribed time.
4) I also impose penalty of Rs.10,000/- (Rupees Ten Thousand only) under Section 77 of the Finance Act, 1994 for violation of Section 70 of the Act read with Rule 7 of the Service Tax Rules 1994 for improper submission of ST-3 return by the party.
The adjudged dues may be deposited forthwith.
2.6 The appeal filed by the Appellant has been dismissed as per the impugned order. Hence this appeal.
3.1 We have heard Shri Atul Gupta, learned Advocate appearing on behalf of the Appellant and Shri Santosh Kumar 12 Service Tax Appeal No.70297 of 2019 learned Departmental Representative appearing on behalf of the Revenue.
3.2 Arguing for the Appellant learned counsel submits that:-
(a) Appellant is not liable to pay service tax under the head of sponsorship services. The demand of service tax has been made from the Appellant on reverse charge basis as per Rule 2(d)(vii) of the Service Tax Rules, 1994 on the alleged sponsorship services received by the Appellant.
(b) Rule 2(d)(vii) categorically states that the recipient of the sponsorship is liable to pay service tax only when it is received by a body corporate or a firm. Without establishing that the Appellant is a body corporate or a firm to invoke the provisions of Rule 2(d)(vii) could not have been invoked and Appellant had liable to pay service tax.
(c) Appellant is a society registered under the Societies Registration Act, 1860 and the Hon'ble Supreme Court in the case of Board of Trustees, Ayurvedic and Unani Tibia College, Delhi V/s State of Delhi, AIR 1962 SC 458 held that though a society may have characteristics of a legal entity under Societies Registration Act yet there was no intention under the said Act to incorporate the society.
(d) Same view has been expressed by Ministry of Corporate Affairs vide Circular No.8(26)/2(7)/63-PR, dated 13.03.1963 and the decision of the Hon'ble Supreme Court in the case of Llachi Devi v. Jain Society, Protection of Orphans India, AIR 2003 SC 3397.
(e) Service Tax Rules also makes distinction between a body corporate and society registered under Societies Act. Thus the demand by invoking provisions of Rule 2(d)(vii) is bad in law.
(f) There was no agreement or written contract or signed MOU between the parties to establish that the Appellant have availed sponsorship services from ORGANIZING COMMITTEE OF 13 Service Tax Appeal No.70297 of 2019 COMMONWEALTH GAMES 2010 . No such agreement was ever entered into or signed by the Appellant or any member of the consortium. The consortium has valued the sponsorship to around Rs.45 Crores which was subsequently reevaluated by the Assessing Committee as Rs.5 Crores. This revised value was never admitted/accepted by the Consortium/Appellant and hence was never implemented. To the contrary consortium confirmed to OCCGW the total cost incurred for training of the volunteers is Rs.30,06,871/- and requested to OCCGW to update their Revenues accordingly. In respect of this cost incurred they have discharged the service tax on forward charge basis.
(g) These proceedings are without the jurisdiction as Show Cause Notice was issued to the wrong person. Even if it was admitted that Sponsorship rights were granted by OCCGW to Amity University Consortium and other members then also the demand could not have been made from the Appellant as the Appellant is only a constituent of the said consortium. The consortium comprises of (a) The Event Knowledge Services (EKS), Switzerland, (b) Knowledge Systems & Solutions (KSS), Monaco, and (c) Anglia Ruskin University, Cambridge, UK. It was this consortium of various persons including the Appellant, which was assigned subject rights by ORGANIZING COMMITTEE OF COMMONWEALTH GAMES 2010 .
(h) The alleged activities are not taxable because they are in limitation to the sports event. It is a settled position in law that the date of rendering service is determined by the date of agreement entered into by parties. In absence of any such agreement Show Cause Notice or impugned order do not establish or demonstrate at which point of time such services were rendered to the Appellant. In any case if such services were rendered the value of such services was limited to Rs.13,16,871/- for which the Appellant have already discharged service tax liability.
14 Service Tax Appeal No.70297 of 2019
(i) Extended period of limitation is not invokable. In the present case has have been held in series of decisions which are as follows:-
Commissioner v. Gowri Computers (P) Ltd., 2012 (25) STR 380 (Tri. - Bang) Commissioner v. Chemphar Drugs & Liniments, 1989 (40) ELT 276 (SC) Padmini Products v. Commissioner, 1989 (43) ELT 195 (SC) Commissioner v. HMM Limited, 1995 (76) ELT 497 (SC) Nizam Sugar Factory v. Commissioner, 2006 (197) ELT 465 (SC) PVR Ltd. vs. Commissioner of Service Tax, New Delhi 2021 (55) G.S.T.L. 435 (Tri- Del.) Ajay Mishra vs. Commissioner of Service Tax, Delhi
-III 2023 (386) E.L.T. 310 (Tri- Del.)
(j) In view of the above penalties and interest cannot be imposed upon the Appellant in the present case.
3.3 Learned Authorized Representative has reiterated the findings recorded in the impugned order.
4.1 We have considered the impugned order alongwith the submissions made in the appeal and during the course of argument.
4.2 In the present case the basic issue to be decided is whether the Appellant have received any service of Sponsorship by the assessing committee of Organizing Committee Of Commonwealth Games 2010 Delhi. Revenue has contended that the Appellant has received these services and was liable to pay service tax on reverse charge basis in respect of the said services.
4.3 In response to request for proposal dated 23.12.2009 issued by Organizing Committee Of Commonwealth Games 2010 for appointment of training agency/agencies for games-time training, Appellant vide Letter dated 08.02.2010 submits proposal stating as follows:-
15 Service Tax Appeal No.70297 of 2019 "We hereby again reiterate our consent to enter into any collaboration or joint venture, with any national, multinational or a foreign, organization who has such experience in a multi-sporting event such as the Asian Games or Commonwealth Games or Olympic Games & the like and who has been seeking partnership for the Commonwealth Games 2010 for the aforesaid training programme.
It will be a matter of pride and pleasure for us to conduct the aforesaid training programme.
Further, we hereby place on record and convey our readiness and willingness to be The Sponsor for delivering and conducting the training programmes for Games Time Training for the Commonwealth Gamer 2010 as per terms & conditions to be manually agreed upon."
4.4 Subsequently, vide letter dated 25.02.2010 they again stated as follows:-
"During the technical presentation and also our subsequent interaction with you, followed by our letter of 8" February 2010, we hereby reiterate our desire as well as readiness to become the sponsor as well as official trainer for the training of 'Games Work Force'.
During our verbal interaction we have agreed for our willingness to enter into collaboration with any national/multi-national or foreign organization which has experience of multi-sporting event such as Asian/Commonwealth Games or Olympics etc. The organization selected for collaboration would fulfill the conditions as mentioned in your letter under reference, which are reproduced as under:
The training organization must have a proven track record in Multi Sporting events such as Asian, Commonwealth of Olympic Games in order to support the Scope of work in the RFP.
The international vender that our organization chooses to tie up with must be able to propose an approach which exhibits variety and depth in their content creation and raining delivery.
The international training organization that we choose to be the collaborator, must have a Scheduling and Logistics management system to support a project of this magnitude.
The agency with whom we would collaborate must be able to provide a competent pool of trainers and project management team with the relevant experience over and above the list of CV's submitted by your institute in the technical bid.
16 Service Tax Appeal No.70297 of 2019 Hence we are sponsoring the training as well as conducting the same we may be given the status of "Partner" and the associated rights, benefits and privileges of that level."
4.5 By letter dated 22.03.2010 they intimated with regards to the consortium formed for undertaking these activities:-
"We have a consortium of International organisations which together have extensive and proven track record in multi sporting events in terms of providing training for trainers and providing general, role, venue, event, and leadership training for volunteers The International consortium members are:
a) Event Knowledge Services (EKS), Switzerland EKS, headquartered out of Switzerland, provides a full suite o consulting services and knowledge transfer support to large multi-sport events making it a uniquely powerful event partner with unequalled breadth of event coverage and with few pears in terms of its advanced knowledge transfer methodologies and technology applications.
EKS has a lot of experience with Olympic and Commonwealth Games.
More information can be found at www.eks.com
b) Knowledge Systems and Solutions (KSS), Monaco KSS is a Monaco based intellectual property management and development organisation which acts as a provider to major consulting organisations including in the major events sector. As a result of its ownership of a broad range of intellectual property, including relevant training content, process information and related delivery tools. More information can be found at www.knowledgess.com
c) Anglia Ruskin University, Cambridge, UK Anglia Ruskin is one of the largest and leading Universities of England established over 160 years ago and they have been involved in developing and delivering innovative training programs in a number of areas which include leadership and management, sport, health and exercise science and tourism and project management.
More information can be found at www.anglia.ac.uk The letters of the International consortium members are enclosed at Annexure-1. Some additional information is enclosed at Annexure-II."
4.6 By the Note-sheet dated 05.04.2010 moved in the office of Organizing committee following has been stated:-
April 5, 2010 Approval of the Sponsorship offer of Amity University Consortium for Games Time Training for D2010 Volunteers.
17 Service Tax Appeal No.70297 of 2019 The Sponsorship Approvals Committee (SAC) has approved the Sponsorship offer of Amity University Consortium for Games Time Training for D2010 Volunteer. The salient features of the accepted proposal are as follows:
1) Amity University consortium to be given the "Co-
Sponsor" Rights & Benefits as per Annexure 1 (enclosed)
2) Amity University Consortium is permitted the use of D2010 Co-Branded logo (Co-Branded logo to be approved by the OC every time before use) The approval of Amity University Consortium at the 'Co- Sponsor' level and the use of D2010 Co-Branded logo has been done on the basis of commitment given by Amity University Consortium for application of marketing rights in newspapers, television etc. (at their own cost) 4.7 In the minutes of the Sponsorship Approval Committee (SAC) dated 05.04.2010 following has been stated:-
18 Service Tax Appeal No.70297 of 2019 4.8 It is also noted that in response to the query made by the Assistant Commissioner, Anti-Evasion, Service Tax investigation is related to the Commonwealth Games 2010 following information was provide:-
19 Service Tax Appeal No.70297 of 2019 20 Service Tax Appeal No.70297 of 2019 4.9 From the above table it is evident that in case of sponsorship in column 6 titled "Whether the agreement is written or not. If written copy may be supplied". It is specifically stated "Yes" and the details of the agreement in form of MOU/ Confirmation letter etc is shown. In the case of Amity University and few others the column there is only mention of "Amity" and 21 Service Tax Appeal No.70297 of 2019 nothing else as in case of others with whom there is a sponsorship agreement. The basic reason for the same is not clearly stated. It may be guess that organizing committee did not agreed with proposal made by the consortium in which the appellant was part in terms of value of other condition and entered into the agreement with them. This fact is confirmed by letter dated 16.03.2011 stating as follows:-
22 Service Tax Appeal No.70297 of 2019 4.10 From the perusal of the above letter it is quite evident that the total cost incurred by the Appellant on this project is only Rs.30,06,871/- and no formal sponsorship agreement was entered between the Amity University and the Organizing Committee.
4.11 The above facts were confirmed by the organizing committee in letter dated 06.05.2013 to the Deputy Commissioner (AE) enclosing the letter of appellant. The letter of organizing committee to Deputy Commissioner is reproduced below:-
23 Service Tax Appeal No.70297 of 2019 4.12 Above correspondence clearly shows that no formal sponsorship agreement was ever signed between the Organizing Committee and Amity University and total cost incurred by the Amity University, Uttar Pradesh towards training of volunteers was only Rs.30,06,871/-.
4.13 The above fact leads to a conclusion that the Appellant as such had ever obtained any such sponsorship from the organizing committee. This fact was stated by Shri Ashish Bindra 24 Service Tax Appeal No.70297 of 2019 in his statement dated 24.07.2015 wherein he has stated as follows:-
25 Service Tax Appeal No.70297 of 2019 26 Service Tax Appeal No.70297 of 2019 27 Service Tax Appeal No.70297 of 2019 4.13 As there is no evidence on record to show that any sponsorship service were received by the Appellant they could not have been made liable to pay service tax on the reverse charge basis.
4.14 We also observe that the Appellant as such was one of the member of the consortium which had entered bid for availment of such services but has had not in any case acted on his own behalf in respect of availment of these services. The liability if any in respect of these services should be on the consortium and not on the one of the consortium member of the consortium. That being so the demand made from the Appellant who is one of the members of consortium cannot be sustained.
28 Service Tax Appeal No.70297 of 2019 4.16 Undisputedly appellant have paid the service tax on the expenses of Rs 30,06,871/- incurred by them on training activities for training the volunteers for Common Wealth Game.
4.17 In absence of any agreement between the appellant and the organizing committee towards the sponsorship of the Commonwealth games, we do not find any merits in the impugned order to the extent it demands service tax on the sponsorship services on reverse charge basis from the Appellant.
4.18 As we do not find any merits in the demand made we are not recording any findings on other issues like limitation etc raised by the appellant in their submissions. As we have set aside the demand of service tax, penalties imposed on the appellant too are set aside.
5.1 Appeal is allowed.
(Operative part of the order pronounced in open court) (P. K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) Nihal