TMI Blog2020 (11) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... lection; etc. - Advertisements exhibited between movies - period 2008-09 and 2009-10 - HELD THAT:- No service tax leviable as aggregate turnover was below ₹ 10 lakhs by virtue of Notification No.8/2008-ST dated 01.03.2008 and amending Notification No. 06/2005-ST dated 01.03.2005 for the period 2008-09 and 2009-10. Car Parking Hire - period 2010-11 - period 2011-12 - period 2012-13 (30.06.2012) - HELD THAT:- Not taxable by virtue of exclusion provided for renting of land for parking purposes under Section 65 (105) (zzzz) of the Finance Act. Car Parking Hire - period 2012-13 (from 01.07.2012) - HELD THAT:- Exempted as per Sl. No. 24 of Notification No. 25/2012-ST dated 20.06.2012 Car parking Hire - period 2013-14 - HELD THAT:- Service Tax paid. Rent Received - Miscellaneous Receipt - Shorts Slides - Period 2010-11 - HELD THAT:- No service tax leviable as aggregate turnover was below ₹ 10 lakhs by virtue of Notification No.06/2005-ST dated 01.03.2005 (₹ 4,84,814/-, after reducing car parking charge). Rent Received - Miscellaneous Receipt - Shorts Slides - Period 2011-12 - HELD THAT:- No service tax leviable as aggregate turnover was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h agreement dated August 29, 2012 entered into between M/s. A.A. Films and the Appellant, the Appellant agreed to share 50%/40% of the Net Box Office Collection, with M/s. A.A. Films subject to a maximum theatre share of ₹ 2,80,000/-. 3. The Department, however believed that the Appellant was providing various elements of inter connected services to the Distributors, such as renting/ letting/ leasing of theatre for exhibition of films; manpower to manage the theatre operations, provision of projector and other related equipment to screen the films; arranging of power supply and providing arrangements to collect the box office collections. According to the Department, the essential character of the bundle of services provided by the Appellant was in the nature of renting of immovable property service which would be taxable under section 65(105) (zzzz) of the Finance Act 1994 [the Finance Act] for the period up to June 30, 2012 and under section 66E(a) of the Finance Act read with section 66F(3)(b) of the Finance Act for the period from July 1, 2012 to March 31, 2014. The view of the Department was that copy rights of movies/ films were not transferred/ sold by the film Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 66D of the Act after introduction of negative services regime w.e.f. 01.07.2012. 6. The impugned order has also confirmed the demand for income under the heads miscellaneous receipt , car parking higher , shots and slides and rent receipt shown in the balance sheet. 7. Shri B.L.Narasimhan learned counsel appearing for the Appellant has made the following submissions: (i) The Appellant is not providing renting of immovable property services to the Distributors. 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. In the instant case, the immovable property i.e. the theatre is used and occupied by the Appellant in its own right to screen the film and at no point of time, the theatre is used by the Distributor; (ii) A bare perusal of the agreements between the Appellant and the Distributors would make it abundantly clear that it is the Appellant who is making payments to the Distributors for grant of theatrical rights, which indicates bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; and (vi). Even short-term renting of vacant land for business or commerce purpose is taxable under renting of immovable property service w.e.f July 1, 2010 in view of the judgment of the Allahabad High Court in Commissioner of Service Tax, Noida vs Greater Noida Development Authority [2015 (40) S.T.R 46 (All.)]. Thus, car parking hire charges, whether in the open or inside the building, are taxable under this head. 9. The submissions advanced by learned counsel for the Appellant and the learned Authorised Representative of the Department have been considered. 10. It is not in dispute that the Appellant is the owner of a cinema hall. According to the Appellant, the theatrical exhibition rights were transferred to the Appellant under the agreements on the basis on which the Appellant exhibited the movies in the theatre. For obtaining such rights, the Appellant agreed to share a specified percentage of the Net Box Office Collection with the Distributors. 11. The show cause notice April 17, 2014 makes reference to the agreement dated August 27, 2012, executed between M/s. A.A. Films and the Appellant for exhibiting the film title Student of the Year . It is this agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Net Box Office Collection (NBOC) shall be calculated as gross box-office receipts, less entertainment tax (if applicable, news reel hire (@0.3%) and municipal show tax (if applicable). xxxx xxxx xxxx 6. Exhibitor shall retain the Distributor s Share in trust and pay, after adjustment of the Advance or non-refundable Minimum Guarantee, the Distributor s Share that may accrue to the Distributor ten (10) days of completion of every week to which it pertains, whether or not the bill pertaining to the exhibition is received by the Exhibitor, failing which the Exhibitor shall pay the Distributor s S along with interest al he rate of 18% p.a. computed on the delayed payment commencing from the stipulated date of payment till the actual date of payment or realization. It is further agreed that provision of interest shall not mean or entitle the Exhibitor to detain the due amount of the Distributor's Share. However, in the event of default by the Exhibitor in payment, the Distributor shall be entitled recover all dues including (principal and interest) through the association of the concerned circuit. Timely Payment is essence of the Agreement. Bonus/Rebate on Distributor Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to examine them. The agreement with M/s. A.A. Films that was enclosed as the seventh relied upon document has only to be examined. A perusal of the agreement between the Appellant and the Distributor would also make it abundantly clear that it is the Appellant who makes payment to the Distributor 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. 16. This issue also came up for consideration before a Division Bench of the Tribunal in Moti Talkies. It was held that the demand of service tax under renting of immovable property service was not justified for the reason that the Appellant had not provided any service to the Distributor, nor the Distributor had made any payment to the Appellant as a consideration for the alleged service. The relevant portion of the decision is reproduced below: Agreements entered into between distributors and the Appellant, who is an exhibitor for screening pictures, have been considered to be agreements for renting of immovable property as defined under section 65(90a) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he alleged service. In fact, the appellant who has paid money to the distributors for the screening rights conferred upon the appellant. The Commissioner (Appeals) completely misread the agreements entered into between the appellant as an exhibitor of the films and the distributors to arrive at a conclusion that the appellant was providing the service of ―renting of immovable property. xxxx xxxx xxxx 23. The position in law does not change with effect from 1 July, 2012 because even under section 66B of the Finance Act, service tax is levied on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another. Though, ―renting of immovable property‖ is a declared service under section 66E of the Finance Act, then too under section 67(1) of the Finance Act, the value shall, in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him. The appellant is not receiving any payment from the distributor and, therefore, no service can be said to have b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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