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2020 (11) TMI 436

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....ntered 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. It is in exercise of such rights obtained from the Distributors that the Appellant exhibited movies in its theatre. In lieu of obtaining such rights, the Appellant agreed to share a specified percentage of Net Box Office Collection with the Distributors, subject to the conditions specified in the agreements. In one such agreement dated March 23, 2013 entered into between M/s. Eros International Media and the Appellant, the Appellant agreed to share 50% of the Net Box Office Collection, subject to a maximum theatre share of Rs. 1,75,000/-. 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 De....

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....ticee received charges termed by them as Box Office collection share. The terms of contract also substantiate my findings. 9.20 In view of above, the noticee's plan that there is no provision of service and hence no service tax liability is found baseless and thus their activities are rendered liable to service tax under the major head 'Renting of Immovable Property', which is taxable under erstwhile Section 65 (105) (zzzz) of the Act ibid upto 30.06.2012. Further the service provided by the noticee to the Distributors remained taxable under clause (a) of Section 66E of the Act ibid as "Declared Services" and is not covered in the negative list as provided under Section 66D of the Act after introduction of negative services regime w.e.f. 01.07.2012." xxxx xxxx xxxx 11.1 As regards to weighing machine receipts, the noticee has submitted in their written submissions filed on 20.10.2014 that the income earned by the Noticee was by way of collections from the coin box kept for the weighing machine whereby individuals would insert a coin and know the individual's weight by standing on the weighing machine. They also argued that the said incomes were not in the nature of income....

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....related to the screening of films in their theatre for the annual film festival organized by Hindustan Times. These services are exactly the same as screening of films under an agreement with the distributors on regular show basis. I have analysed the issue of their exhibition of films as Exhibitor vis-à-vis share from NBOC and held the same to be liable to service tax under renting of immovable service. Therefore, the threshold exemption is not available to them under Notification No. 8/2008 dated 01.03.2008 and therefore I hold that they are liable to pay service tax for the period 2008-09 to 2012-13 on such services. Accordingly, the noticee is liable to pay service tax on amount of Rs. 3,17,397/- received during 2008-09 to 2012-13 as demanded in SCN dated 21.04.2014. They are also liable to pay service tax on amount of Rs. 72,000/- received during 2013-14 as demanded in SCN dated 20.04.2015. 11.5 The noticee have also argued that such income for the period from 01.04.2008 to 30.09.20O8 was beyond the extended period of five years and hence the demand was not sustainable. However, I find that they have not produced any documentary evidence to show that the amount so rec....

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....der. It is his submission that the Principal Commissioner committed no illegality in confirming the demand. 8. The submissions advanced by learned counsel for the Appellant and the learned Authorised Representative of the Department have been considered. 9. 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. 10. 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....

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....lant is the owner of a cinema hall situated at Chandni Chowk, New Delhi and is engaged in the business of exhibiting films in its theatre. The copy right over the films is owned by the distributors. The appellant enters into agreements with the film distributors to obtain such copy rights under which the right to exhibit the films is transferred to the appellant, either temporarily or in perpetuity, depending upon the nature of the agreements between the parties. xxxx xxxx xxxx 11. It is more than apparent from a bare perusal of the aforesaid agreements that they have been entered into between the appellant as an exhibitor and the distributors for screening of the films on the terms and conditions mentioned therein. The payments contemplated under the terms and conditions either require the exhibitor to pay a fixed amount or a certain percentage, subject to minimum exhibitor share or theatre share of effective shows in a week. xxxx xxxx xxxx 16. It is very difficult to even visualize that the appellant is providing any service to the distributor by renting of immovable property or even any other service in relation to such renting. The agreements that have been executed bet....