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2019 (4) TMI 2043 - AT - Service TaxClassification of services - Business Support Service or not - agreements with the distributors/sub distributors such as Mukta Arts Limited, PVR Pictures Ltd, UTV Software Communications Ltd, Reliance Big Entertainment Pvt Ltd etc. for display of the films/movies at the multiplex cinema screens - agreements are for revenue sharing with the distributors/ sub distributors - HELD THAT:- The appellant has been screening various films in their multiplex on behalf of the film distributors such as Mukta Arts Limited, PVR Pictures Ltd, UTV Software Communications Ltd, Reliance Big Entertainment Pvt Ltd etc. As per the agreement entered into by the appellant and the various distributors/ sub distributors, the revenue generated from the selling of the tickets of movies was shared between the appellant and the various distributors in percentage terms - All the revenue receipts have duly been reflected in the books of accounts of the appellants. At the same time the revenue which has been paid by the appellant to the distributors/ sub distributors has been reflected and expenditure towards purchase of film rights for screening of the movies have also been reflected in the books of accounts. As per the agreement entered into between the appellant and the distributors/ sub distributors, both the parties have mutually agreed to work together, wherein the appellant being the owner of the theatre is exhibiting the movies provided by the distributors/ sub distributors. However, the copy rights of the film are retained by the distributors themselves. The appellant provides the theatre and other facilities such as arrangement of projector and other related equipments to screen the film. It is found that under this arrangement, both the parties are working for mutual benefit of each other. They are not providing any service to any other party whereas they are providing services to self. Also, the revenue generated by the appellant which is shared by the appellant and the distributors is from the sale of movie tickets to the customers and from this revenue he is also making payment to the distributors in spite of the fact that copy right of exhibiting the movie has not been passed on to him. This purely reflect that a partnership between the distributor and the appellant exist to display the movie in the appellants theater - in such a situation the element of service from appellant to the distributor does not exist and rather we find that it is a service to himself. The issue is no longer res integra as it has been already decided by this Tribunal in the case of M/S PVS MULTIPLEX INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT-I [2017 (11) TMI 156 - CESTAT ALLAHABAD] where it was held that there is no dispute of fact that the appellant have been screening films in their multiplex on Revenue Sharing basis, which is undisputed finding recorded by the ld. Commissioner in the impugned order. Accordingly, we hold that the appellant is not liable to pay Service Tax for Screening of Films and payments to distributors in their theatre - the facts of the present matter are identical to the above mentioned decision, therefore, the above decision is very much applicable to the present matter also. The activity undertaken by the appellant is not classifiable under service tax category of the “Business Support Service‟ and therefore, not taxable - there is no merit in the impugned order-in original - Appeal allowed - decided in favor of appellant.
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