TMI Blog2022 (3) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices - whether service tax can be levied on the cinema owner s share of the Net Box office collections? - HELD THAT:- Movies are made by producers investing money and the producer acquires the copy right to the movies which, he then transfers to various distributors across the country for a consideration. The distributors, in turn, enter into agreements with various cinema/ theater owners and provide license/ right to screen the movie in their theaters. The Net Box Office collections, i.e, the proceeds of sales of tickets minus some expenses such as taxes are shared between the cinema owners and the distributors. The question as to whether the share of collections received by the cinema owners can be taxed has been decided in negative by this Tribunal in the case of M/S. MOTI TALKIES VERSUS COMMISSIONER OF SERVICE TAX, DELHI I [ 2020 (6) TMI 87 - CESTAT NEW DELHI] where it was held that 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri B.K. Jain, Authorized Representative for the Respondent ORDER M/s Five Vision Promoters Private Limited1 is the owner of Opulent Mall, GT Road, Ghaziabad and is registered with the Service Tax Department. Its records were audited by the Department on 25.01.2012, 27.01.2012, 13.02.2012 and 15.02.2012 and it was felt that the appellant had not discharged service tax on the following two services: (i) Renting of immovable property ₹ 29,91,662/-on the shops which it rented in the mall. (ii) Business Support Services ₹ 1,31,21,900/- on the amount it received as a share of the Net Box office collections from screening movies in the cinemas. The appellant did not dispute the demand of service tax on renting of immovable property service and paid the same during audit itself. This demand was on account of the rent which it had received by renting shops in the mall. The appellant is disputing the second demand. 2. Commissioner, Central Excise And Service Tax, Ghaziabad issued a show Cause notice dated 30.01.2015 to the appellant demanding service tax on both along with interest and further proposing to impose penalties. After following the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pressed by Appellant. (ix) The demand is also time-barred. They rely on the following case laws: a) Commissioner of Central Excise Service Tax, Bangalore v. M/s Adecco Flexione Workforce Solutions Ltd., 2011-TIOL-635-HC-KAR-ST b) Commissioner of Service Tax, Bangalore v. Master Kleen, 2012(25) S.T.R. 439 (Kar.) c) CCE, Indore, MP v. Shri Mukesh Jain, 2012-TIOL-84-CESTAT-DEL. 5. Learned Departmental Representative agrees that the appellant had paid service tax on renting of immovable property service but asserts had not paid interest before the issue of show cause notice. Therefore, the show cause notice was issued in respect of this amount. He further submits that the appellant is not entitled to the benefit of Section 73(3) as the appellant had not disclosed that it had been rendering the service of renting of immovable property and therefore, the appellant s case is squarely covered by section 73(4). He reiterates the findings of the learned Commissioner in this regard which are as follows: 6. As regards short payment of Service Tax on renting of shops, it is found that Renting of Immovable Property was taxable service as defined under erstwhile Section 65(10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the [Central Excise Officer] of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid : Provided that the Central Excise Officer may determine the amount of short-payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been 18 paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of thirty months referred to in sub- section (1) shall be counted from the date of receipt of such information of payment. Explanation.1- For the removal of doubts, it is hereby declared that the interest under section 75 shall be payable on the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and management of multiplexes through the PVR. The appellant entered into agreements with the distributors of films for temporary transfer of copyrights through assignment or licensing for exhibition of movies. The Net Box Office Collection (Gross revenue from sale of tickets minus some expenses like taxes) are, as per the agreements, shared between the distributors of the films and the appellant. The allegation in the show cause notice is that this arrangement has resulted in creation of an association of persons, i.e., an unincorporated joint venture and that the appellant was providing business support services in the form of infrastructural support and operational or administrative assistance to such joint a venture. The appellant s share of Net Box Office collections is the consideration received for such services which are in the nature of Business support services and service tax is proposed to be charged on the services. Learned Commissioner has, in the impugned order, confirmed the demand as such along with interest invoking extended period of limitation and has also imposed penalty under Section 78 upon the appellant. Learned Counsel for the appellant submits that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Uttar Pradesh State Authorities and not on behalf of the Distributor. (v) Each member does not have an equal voice in controlling the project. (vi) The distributors do not control the screening of the film. The Distributor does not share the loss and risk. (vii) Intention of parties is not to create a new entity. (viii) When read as whole, the agreement, it emerges that the intention of the parties is that Appellant screens the films on its own account. (ix) The agreement is signed with a clear intention to screen the movie and not to either rent the theatre or create any partnership between the Parties. (x) Each member is not accountable to each other for their respective acts. (xi) Appellant and distributors do not act as principal and agent to one another, which is one of the features of a partnership/joint venture. (xii) Appellant does not act as an agent of the distributor while screening the film. (xiii) The conditions relating to cancellation of the show, unauthorized use of copying of film, loss or theft of the print etc. in the agreements with the distributors are in the nature of conditions to ensure that the copyright in the film is proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se/ right to screen the movie in their theaters. The Net Box Office collections, i.e, the proceeds of sales of tickets minus some expenses such as taxes are shared between the cinema owners and the distributors. The question as to whether the share of collections received by the cinema owners can be taxed has been decided in negative by this Tribunal in the case of Service Tax Appeal No. 30488-30489 of 2016 in the case of Inox Leisure Ltd Vs. Commissioner of Service Tax, Hyderabad and it has also been decided in the following other cases: (a) M/s. PVS Multiplex India Pvt. Ltd. vs. Commissioner of Central Excise, Meerut-l - 2017 (11) TMI-156-CESTAT Allahabad; (b) M/s. Moti Talkies vs. Commissioner of Service Tax, Delhi-l 2020 (6) TMI 87 CESTAT New Delhi; (c) M/s. The Asian Art Printers (Sheila Theatre) vs. Principal Commissioner of Service Tax, Delhi-l - 2020 (12) TMI 1012 CESTAT New Delhi; (d) Shri Vinay Kumar, Proprietor of M/s. Regal Theatre vs. Principal Commissioner of Service Tax, Delhi-l 2020 (11) TMI 436-CESTAT New Delhi; (e) M/s. Golcha Properties Pvt. Ltd. vs. Principal Commissioner of Service Tax, Delhi-l 2020 (11) TMI 137 CESTAT New De ..... 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