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2017 (9) TMI 507 - AT - Service TaxLease Rentals collected by appellant from Theatre owner - Supply of tangible goods for use - case of Revenue is that onetime registration fees collected by the Appellant from the theatre owner is nothing but a part of the consideration for providing the above said taxable service and has to be included in gross amount for providing services and service tax demanded on the same - extended period of limitation - Held that: - there is no suppression of fact on appellant's part. It is also observed that the appellant obtained DDQ (Determination of Disputed Question) dt. 26.6.2008 from Commissioner of Sales Tax, who held that lease rental is liable for VAT. The appellant accordingly was discharging the VAT liability even before the taxability on ‘Supply of Tangible goods for use’. With the above undisputed facts. We are of the clear view that there is no suppression of facts with intent to evade payment of Service Tax on lease rentals on DCE, on the part of the appellant. Therefore we hold that the demand for extended period is clearly time barred - As regard demand of service tax on merit for the normal period, various vital facts and submissions of the Appellant were not properly verified by the Adjudicating Authority, therefore we remand the case relating to lease rentals & registration fees for the normal period with direction to Adjudicating Authority to verify whether the contentions made by the Appellants are correct. CENVAT credit - Capital goods - content delivery services and sale of space for advertisement service - Held that: - there was no contract or agreement between the Theatre owners and the persons whose advertisements were exhibited in cinema theaters. Only the Appellant had an agreement with such persons to exhibit the advertisements. Thus there is no ground to hold that the Appellant were providing any business supports service to Theater owner. The DCE equipment at the most can be said to have been jointly used by the Appellant and the Theater owner to provide the services of Sale of Space for Advertisement. The DCE Equipment being specified Capital goods as defined under Rule 2 (a) and having been used for providing output service are eligible for availment of credit. In terms of Rule 3(1) of Cenvat Credit Rules and proviso to Rule 3 (5) it transpires that the credit is available even if the Capital goods are removed outside the premises of the provider of output service for providing the output service - The appellant paid service tax on service of sale of space for advertisement which was provided through the said DCE. It therefore leaves no doubt that credit on Capital goods is available even if they are removed outside from the premises of the Appellant for providing output service. We are therefore of the view that there is no ground for denial of cenvat credit on Capital goods to the Appellant. Extended period of limitation - Held that: - Adjudicating Authority has admitted that the Appellants have disclosed CENVAT Credit on Capital goods in the return, despite recording this, he has given adverse finding on limitation. Considering the fact that Appellants have been paying VAT from 2006 that too at higher rate than the service tax rate, even before SOTGU Services became taxable service, no malafide can be attributed to invoke extended period for denying cenvat credit - we set aside the demand of Cenvat Credit on Digital Cinema Equipment on merit as well as on limitation. Appeal allowed in part and part matter on remand.
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