TMI Blog2020 (11) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... rty 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 - It is, therefore, 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 service - demand under the income heads of 'weighing machine receipts and 'miscellaneous income' - period 2008-09 to 2013-14 - HELD THAT:- The demand of service tax on the income head of 'weighing machine receipts is not sustainable as the said income is on account of collections from the coin box kept with the weighing machine. By inserting a coin in the coin box an individual would know the weight. This income cannot be classified as 'renting of immovable property service - The income received under the head 'miscellaneous receipts' is in connection with the screening of movies for the annual film festival held by Hindustan Times. The said income cannot also be said to be towards provision of any 'rentin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant 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 Distributors, either temporarily or otherwise, and so the Appellant was only letting out its premises for exhibition of films to the Distributors. 4. The Appellant filed replies to the two show cause notices but the Principal Commissioner, by the impugned order dated January 25, 2016, confirmed the demand for the period October 2008 to March 2014. The demand proposed for the period April 2008 to September 2008 was dropped for the reason that it was beyond the period prescribed under the Finance Act. 5. The impugned order holds that service tax will be leviable under the head of renting of immovable property and the relevant portion of the order is reproduced below: 9.18 I therefore come to a conclusion that while allowing the use of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmovable property service. They also argued that the same was much below the threshold exemption of ₹ 10 lakhs as provided in the Notification No. 8/2008- ST dated 01.03.2008 in each of the financial years included in the relevant period and hence not liable to service tax. 11.2 I find that the notice has not provided any plausible explanation for non-applicability of service tax on such incomes, except contesting the same on the grounds of exemption limits. The ledger copies submitted by the Noticee on this count do not elaborate the issue. However, I have analysed the issue of their exhibition of films as Exhibitor vis- -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. However, I find that the demand for the period 01.04.2008 to 30.09.2008 is time barred being beyond five years as provided under the provisions of Section 73 of the Act. The notice has provided ledgers of their income for the FY 2008-09 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008. I also note that the noticee has not provided any month-wise bifurcation of such income for the period 01.04.2008 to 31.03.2009 separately. Therefore to compute service tax liability for the period 01.04.2008 to 30.06.2009, I find that the entire income for the period 2008-09 would have to be considered for the purpose of levy of service tax. Therefore, I reject their arguments and hold that they are liable to pay service tax on the gross amount on such services for the relevant period. 6. 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 perusa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 other words, where an immovable property is given for use by the service recipient or where there is a transfer of the right to enjoy property for a certain time for a consideration paid or promised or where there is granting of the right to use and occupy the immovable property by way of tenancy, lease, license, the transaction would be covered under the category of renting of immovable property services. 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 films and at no point of time, the theatre is used by the Distributor. 11. 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. 12. This issue also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he distributors confer rights upon the appellant to screen the film for which the appellant is making payment to the distributors. The distributors are not making any payment to the appellant. Thus, no consideration flows from the distributors to the appellant for the alleged service. xxxx xxxx xxxx 18. It is not possible to accept the reasonings given by the Commissioner (Appeals) for confirming the demand of service tax under ―renting of immovable property‖ for the simple reason that the appellant has not provided any service to the distributors nor the distributors have made any payment to the appellant as consideration for the 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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