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TMI Blog2024 (3) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... pressed her views on merits, thereby imposing fetters on the powers / authority of the adjudicating authority in carrying out the adjudication on remand. 2. All the writ petitions are filed by the petitioners / assessees, challenging the show cause notice(s) / orders-in-original passed by the adjudicating authority. Since the issue involved herein is the same as subject matter in the writ appeals, hence all these writ petitions were tagged with the present batch of writ appeals and posted for joint hearing, as per the administrative order dated 14.12.2022 of the Hon'ble Acting Chief Justice. 3. Heard the learned counsel appearing for all the parties and perused the materials available on record. 4. The challenge before the learned Judge was to the show cause notice(s) proposing to levy or the orders-in-original levying tax on assignment of certain rights in the cinematograph films as representing temporary transfer or permitting use or enjoyment of intellectual property i.e., copyright in the instant case. 5. It was submitted by the respondents in the writ appeals that the impugned notices / orders levied tax, not only on the temporary transfers, but also on the perpetual t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant portions of the Division Bench Order are extracted below: "59. Whether "temporary transfer of copyright or permission to use or enjoyment" amounts to sale of "goods" or "deemed sale" within the meaning of Article 366(29A) of the Constitution, as contended by the Petitioners is to be examined, keeping in view the normal business practice in the film industry and in the light of the principles laid down by the Hon'ble Supreme Court in various decisions upholding the levy of service tax." "110. Conclusion: We hold that the variant modes of business transactions between the producer and distributor, distributor and sub-distributor or area distributor or exhibitor (theatre owner) are not "sale of goods" to fall under Entry 54 List II or Entry 92A List I. By resorting to Entry 97 of List I Residuary Entry to levy service tax, the Parliament is within its legislative competence and Section 65 (105) (zzzzt) is not ultra vires the Constitution. From the production of the cinematograph film till it is exhibited, there are host of commercial activities. Service tax is the value added tax, which applies to the business transactions for consideration involving commercial acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained / enumerated in the negative list from 01.07.2012. A fresh set of provisions containing Definitions, Charging provision, Declared Services and Negative list of Services was introduced w.e.f. 01.07.2012 and the same are extracted below: 65B. Interpretations In this chapter, unless the context otherwise requires,- (1) "actionable claim" shall have the meaning assigned to it in section 3 of the Transfer of Property Act, 1882; ..... (44) "service" mans any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely,- (i) a transfer of the tile in goods or immovable property, by way of sale, gift or in any other manner; or (ii) such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of article 366 of the Constitution; or (iii) a transaction in money or actionable claim; 66. Charge of Service Tax There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve per cent. of the value of taxable services referred to in subclauses (a), (d), (e), (f), (g.) (h), (i), (j), (k), ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) renting of immovable property; ..... (c) temporary transfer or permitting the use or enjoyment of any intellectual property right;" 9. On a perusal of the order impugned in the writ appeals, we find that the learned Judge has expressed that the Court will not embark upon disputed facts and will concern itself solely with the legal provisions involved. Importantly, the learned Judge also recorded that the Revenue's case was that the agreements are a sham designed to camouflage the true intent of the contracting parties rather a colourable device. In this regard, the following portions of the learned Judge are relevant: "8. .... According to the respondent, the use of the word 'perpetual' in the agreement is only a sham, designed to camouflage the true intent of the petitioner which is to enter into a temporary transaction. Thus, the transactions are vitiated as being colourable. 12. ... Of course, in determining the aforesaid, the Court will not embark upon an examination of disputed facts and will concern itself solely with the legal provisions involved, and their interpretation. Since the interpretation of the law cannot be undertaken in a vacuum, the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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