TMI Blog2022 (3) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... are in the nature of joint venture, where two or more parties come together to carry out a specific economic venture, and share the profits arising from such venture. Such public private partnerships are at times described as collaboration, joint venture, consortium or joint undertaking. Regardless of the name or the legal form in which the same are conducted, they are essentially in the nature of partnership with each co-venturer contributing some of the resources for the furtherance of the joint business activity. It is not possible to sustain the confirmation of the demand by the order dated 16.06.2016 passed by the Commissioner - Appeal allowed - decided in favor of appellant. - SERVICE TAX APPEAL NO. 87533 OF 2016 - A/85216/2022 - Dated:- 14-3-2022 - MR. DILIP GUPTA, PRESIDENT AND MR. C.J. MATHEW, MEMBER (TECHNICAL) Shri Gopal Mudhra, Ms. Ginita Bodani and Shri Akash Khandelwal, Advocates for the Appellant Shri Nitin Ranjan, Authorised Representative of the Department ORDER Inox Leisure Ltd [The appellant] has filed this appeal to assail the order dated 16.06.2016 passed by the Commissioner, Service Tax-V, Mumbai [the Commissione r ] by which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultimately held that the bouquet of services rendered by the appellant to the Association of Persons would fall under the category of BSS both, before the amendment and after amendment in the definition of BSS. 5. Shri Gopal Mundhra assisted by Ms. Ginita Bodani and Shri Akash Khandelwal, learned counsel for the appellant made the following submissions: (i) The issue involved in the appeal has been decided in favour of the appellant in the following decisions of the Tribunal: (a) Inox Leisure Ltd. vs. Commissioner of Service Tax, Hyderabad [2021 (10) TMI 893-CESTAT HYDERABAD] (b) M/s. PVS Multiplex India Pvt. Ltd. vs. Commissioner of Central Excise, Meerut-l [2017 (11) TMI-156- CESTAT Allahabad]; (c) M/s. Moti Talkies vs. Commissioner of Service Tax, Delhi-l [2020 (6) TMI 87- CESTAT New Delhi]; (d) M/s. The Asian Art Printers (Sheila Theatre) vs. Principal Commissioner of Service Tax, Delhi-l [2020 (12) TMI 1012- CESTAT New Delhi ]; (e) Shri Vinay Kumar, Proprietor of M/s. Regal Theatre vs. Principal Commissioner of Service Tax, Delhi-l [2020 (11) TMI 436- CESTAT New Delhi ]; (f) M/s. Golcha Properties Pvt. Ltd. vs. Prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) The appellant is not justified in asserting that the issue involved in this appeal stands decided in favour of the appellant in view of the earlier decisions of the Tribunal since these decisions are not in the context of BSS service provided by the appellant to the distributors/producers; (ii) The producers/suppliers of films require a theatre to screen the films and the appellant provides assistance and support for screening the films. Thus, the appellant extends support to the producers/suppliers of films by providing the infrastructure and this activity would fall under the definition of BSS; and (iii) In view of the Circulars dated 23.02.2009 and 13.12.2011 issued by the Central Board of Excise and Customs in connection with service tax on movie theaters, the appellant is not justified in contending that service tax would not be leviable if revenue is shared between the appellant and the producers of films. 7. The contentions advanced by the learned counsel for the appellant and the learned authorised representative appearing for the Department have been considered. 8. Support services of business or commerce has been defined in sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department has alleged that the appellant is providing infrastructure support services to the producers/distributors of films under BSS. 12. Such an arrangement between a distributor/producer and an exhibitor of films was examined by a Division Bench of the Tribunal in Moti Talkies . The Department alleged that the agreement was for renting of immovable property as defined under section 65(90a) of the Finance Act. This contention was not accepted by the Tribunal and it was observed that the appellant did not provide any service to the distributors nor the distributors made any payments to the appellant as consideration for the alleged service. In fact, it was the appellant who had paid money to the distributors for the screening rights conferred upon the appellant. The observations of the Bench are as follows: 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 certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at as the appellant was screening films on revenue sharing basis, the appellant was not liable to pay service tax on the payments made to the distributors for screening the films. 7. Having considered contentions and on perusal of the facts on record, we are satisfied that there is no dispute of fact that the appellant have been screening films in their multiplex on Revenue Sharing basis, which is undisputed finding recorded by the ld. Commissioner in the impugned order. Accordingly, we hold that the appellant is not liable to pay Service Tax for Screening of Films and payments to distributors in their theatre. (emphasis supplied) 16. This apart, a revenue sharing arrangement does not necessarily imply provision of services, unless the service provider and service recipient relationship is established. This is what was observed by the Tribunal in Mormugao Port Trust, Old World Hospitality and Delhi International Airport. 17. In Mormugao Port Trust, the Tribunal explained that public private partnerships between the Government/Public Enterprises and Private parties are in the nature of joint venture, where two or more parties come together to ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but as entrepreneurs desirous to earn profits, the extent whereof may be contingent upon the success of the venture, rather than any fixed fees or consideration for any specific services. 17 The question that arises for consideration is whether the activity undertaken by a co- venture (partner) for the furtherance of the joint venture (partnership) can be said to be a service rendered by such co-venturer (partner) to the Joint Venture (Partnership). In our view, the answer to this question has to be in the negative inasmuch as whatever the partner does for the furtherance of the business of the partnership, he does so only for advancing his own interest as he has a stake in the success of the venture. There is neither an intention to render a service to the other partners nor is there any consideration fixed as a quid pro quo for any particular service of a partner. All the resources and contribution of a partner enter into a common pool of resource required for running the joint enterprise and if such an enterprise is successful the partners become entitled to profits as a reward for the risks taken by them for investing their resources in the venture. A contractor-contractee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se such an activity cannot fall under Business Support Service . 3. In the light of above, it is clarified that screening of a movie is not a taxable service except where the distributor leases out the theater and the theater owner get a fixed rent. In such case, the service provided by the theater owner would be categorized as Renting of immovable property for furtherance of business or commerce and the theater owner would be liable to pay tax on the rent received from the distributor. The facts of each case and the terms of contract must be examined before a view is taken. 4. All pending cases may be disposed of accordingly. In case any difficulty is faced in implementing these instructions, the same may be brought to the notice of the undersigned. (emphasis supplied) 20. The subsequent Circular dated 13.12.2011 issued by the Central Board of Excise and Customs, apart from the fact that it would not be applicable for confirming a demand for any period prior to 13.12.2011, would also not come to the aid of the Department. The relevant portion of the Circular is reproduced below: 9. Thus, where the distributor or sub-distributor or area distributor enters into a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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