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Fun Multiplex Pvt. Ltd. Versus The Union of India And Others

2015 (7) TMI 392 - BOMBAY HIGH COURT

Validity of Circular - whether the circular would govern the controversy or whether the controversy must be dealt with strictly in terms of the statutory provisions and the circular cannot override the same - clarification on levy of service tax on distributors/sub-distributors of films & exhibitors of movie - Circular No.148/17/2011 Service Tax, dated 13th December, 2011 - Held that:- merely making a reference to some Circular would not mean that the Appellate Tribunal cannot be approached or t .....

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ibunal shall permit the Petitioner to raise all contentions including that the issue must be examined in the light of the arrangements, prevalent practices and customs peculiar to the film industry. Such arrangements and which are in vogue for decades together do not create any relationship and which is assumed to be created by the Revenue. The Circular therefore will have no application and would not apply. Equally, an opportunity should be given to the Petitioner to rely upon such Judgments an .....

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. Kulkarni,JJ. For the Appellant : Mr. Rafique Dada Senior Adv with Mr. Sushant Murthy For the Respondent : Mr. Pradeep S Jetly with Mr. J B Bishra ORDER P. C. By this Writ Petition under Article 226 of the Constitution of India, the Petitioner claims a declaration that a Circular bearing No.148/17/2011 Service Tax, dated 13th December, 2011, issued by Respondent No. 2 and an order-in-original dated 12th February, 2015 passed by Respondent No. 3, are both ultra vires the Finance Act, 1994 and/or .....

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Finance Act, 1994 as amended from time to time. It was submitted that whether the circular would govern the controversy or whether the controversy must be dealt with strictly in terms of the statutory provisions and the circular cannot override the same are contentions which can be raised conveniently before the Appellate Forum. The Appellate Forum is not thus prevented from considering all challenges to the impugned order and if appropriate grounds are raised in support of the ultimate prayer .....

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lhi proceeds to create a relationship and styled as Association of Persons, though non existent. This is a case where a business practice in the film industry has been recognised and throughout. If the business practice was that if the producer of the film, who owns the intellectual property rights of the film, temporarily transfers the rights to a person, who directly or indirectly enters into an agreement with the exhibitor, who is ordinarily a theater owner, then, these distinct acts and form .....

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decision in the case of New Horizons Limited vs. Union of India reported in 1995 1 SCC 478 and in the case of Gammon India Limited vs. Commissioner of Customs, Mumbai reported in 2011 (269) ELT 289 (SC) does not enable the authority to issue the Circular and thereafter bring the arrangement, which is ordinarily on a principal to principal basis, to tax as an Association of Persons or such other known legal entity. In the circumstances, no useful purpose will be served by going before the Appella .....

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They are exhibiting cinematographic films in the theaters taken on rental basis from others. For exhibiting the cinematographic films, the noticee has adopted revenue sharing arrangement with distributors, sub distributors or others. The Department/Revenue alleges that the the Petitioner, who was engaged in the activity of exhibiting cinematographic films either in the theatre owned by it or in the theatre taken on rent basis, is not paying Service Tax on the revenue retained by it. Therefore, .....

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on. The Noticee, namely, the Petitioner filed a detailed reply and denied and refuted the allegations. Thereafter, at the oral hearing before the Commissioner, extensive arguments were canvassed and which touch some disputed facts and merits. The Commissioner's findings may refer to a Circular issued by the Board, but prima facie, it is not entirely based on the same. It is based on some understanding of the legal provisions by the Commissioner and their applicability to the given facts and .....

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