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2020 (12) TMI 1012 - AT - Service TaxRenting of immovable property Service - Bundled services - Appellant had entered into agreements with films Distributors under which the theatrical exhibition rights for exhibition of the films were transferred to the Appellant, either for a specified number of shows and period or in perpetuity - HELD THAT:- The agreements entered into between the Appellant and the film Distributors clearly indicate that the film Distributors had granted theatrical exhibition rights to the Appellant and in return of transfer of such rights, the Appellant had agreed to pay certain amount to the Distributors, fixed generally as a percentage of Net Box Office Collection. The Principal Commissioner found that the Appellant had provided ‘renting of immovable property’ services. For an activity to fall under ‘renting of immovable property’ services, the nature of the activity should be that of renting or letting or leasing or licensing or other similar arrangements of immovable property, for use in the course or furtherance of business or commerce - A perusal of the agreements between the Appellant and the Distributors would also make it abundantly clear that it is the Appellant who makes payment to the Distributors for grant of theatrical rights. This clearly indicates the flow of service and the consideration. Thus, as it is the Appellant who pays a fixed consideration to the Distributor, no service tax can be levied on the Appellant - it is not possible to sustain the finding recorded by the Principal Commissioner that ‘renting of immovable property’ service had been rendered by the Appellant to the film distributors. Renting of Immovable Property - amount received by the Appellant under ‘miscellaneous receipts’ and ‘license fee’ from Snack Bar - demand of service tax - HELD THAT:- The confirmation of demand of ₹ 36,000/- covered under “renting of immovable property” service is much below the threshold exemption of ₹ 10,00,000/- provided in the notification dated June 20, 2012 and hence not liable to service tax. The income received by the Appellant under “Shots and Slides Hire” income is on account of exhibition of advertisement films and slides of vendors, during the showcasing of movies. This income is not taxable w.e.f July 1, 2012 as it covered under the negative list provided under section 66 D(g) of the Finance Act, which relates to “selling of space or time slots for advertisement, other than advertisement broadcast by radio or television. Even for the period prior to July 1, 2012, this service is in the nature of exhibiting shots/graphic films, still slides and cannot be classified as ‘renting of immovable property’ service - interest amount income shown by the Appellant in its books of account represents the income earned by the Appellant from the deposits held in bank account and is not towards the ‘renting of immovable property’ service. Appeal allowed - decided in favor of appellant.
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