DLF LTD. Vs. COMMISSIONER OF SERVICE TAX, DELHI

JUDGEMENT

(1.) THE prayer in the application is to dispense with condition of pre -deposit of Service tax of Rs. 4.94 crores and education cess of Rs. 9.60 lakhs and Rs. 4.80 lakhs which stands confirmed against the applicant/appellant and penalty of identical amount imposed upon the applicant under Sections 78 of Finance Act, 1994.

(2.) In addition a penalty of Rs. 5,000/ - stands imposed upon the applicant under Section 77 of the Finance Act. After hearing both sides duly represented by Shri B.L. Narsimhan, learned Advocate appearing for the appellant and Shri K.P. Singh, learned SDR appearing for the Revenue, we find that the appellant entered into an agreement with BCCI -IPL dated 13 -2 -2008 for title sponsor agreement wherein the appellant was appointed as exclusive title sponsor of the League for the Cricket IPL 20 -20 matches at a consideration of Rs. 40 crores. The demand against the appellant stands confirmed on the ground that the activity of sponsoring the IPL is liable to Service tax under the category of "sponsorship service" in terms of Section 55(99a) of Finance Act, 1994 read with sub -clause (zzzn) of Section 65(105) of Chapter 4 of Finance Act, 1994. The proceedings so initiated against the appellant stands culminated into passing of impugned order. The taxable service of sponsorship service stands defined in Section 65(105)(zzzn) read with Section 65(99a) of Finance Act, 1994. For better appreciation, we produce relevant provisions of Finance Act, 1994, which are as follows: -

(3.) THE Commissioner has observed that in terms of agreement entered into between the appellant and BCCI -IPL, League shall mean 20 -20 Cricket league, which has been established by BCCI -IPL, and which it is anticipated shall take place in April -May of each year. The Company stands appointed as the exclusive title sponsor of the League for the duration of the rights period. For examining the various terms and conditions of the agreement, he has concluded that the agreement squarely stands covered by the definition of sponsorship service for the purpose of levy of Service tax.