TMI Blog2024 (4) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant to the exclusion of all including the owner of the said copyright. The issue is otherwise no more res-integra. Various decisions have clarified that Revenue sharing arrangement in itself does not necessarily imply provision of service, unless service provider and service recipient relationship is established - reliance can be placed in DELHI INTERNATIONAL AIRPORT P. LTD. MUMBAI INTERNATIONAL AIRPORT P. LTD. VERSUS UNION OF INDIA ORS. [ 2017 (2) TMI 775 - DELHI HIGH COURT] - there is otherwise nothing on record to establish the said relationship. There are no reason to differ with the findings arrived at in the Order-in-Appeal, the same is accordingly upheld - appeal of Revenue dismissed. - HON BLE MR. RAJU , MEMBER ( TECHNICAL ) And HON BLE DR. RACHNA GUPTA , MEMBER ( JUDICIAL ) Shri S. K. Meena , Authorized Representative for the Appellant Shri Darmesh Srivastava , Chartered Accountant for the Respondent ORDER DR. RACHNA GUPTA The appellant in the present appeal is registered with the Service Tax Department for rendering services as that of Selling of Space or time slots for Advertisements and Security/Detective Agency Services . Department got an information about appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice is pre as well as post negative list which came into effect from 01.07.2012. It is mentioned that for the period prior 01.07.2012, the Board Circular No. 109/03/2009 dated 23.02.2009 and subsequent Circular No. 148/17/2011 dated 13.12.2011, have clarified that the activity of screening of films supplied by the film distributors would fall under the taxable category either of Renting of Immovable Property or of Business Support Service , however, depending upon the arrangement between the film distributor and the theatre owner. The circular clarifies that even in case of principle to principle arrangement where no copyrights were temporarily transferred, the service tax implication under Business Support Service shall be applicable qua the theatre owner. For the post negative list regime, Learned Authorized Representative submitted that the activity is not covered under the negative list mentioned in 66D of the Finance Act, 1994, therefore, it was a taxable service. Hence, the demand of service tax was rightly confirmed by the original adjudicating authority. The Commissioner (Appeals) has failed to take into consideration the said Circulars and also the fact that the activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the agreement executed between the appellant and its distributor is relevant:- Term 5 provides as under- The exhibitor shall retain the distributor's share in trust and after adjustment of the refundable advance or non-refundable minimum guarantee, pay the distributor's share that may accrue to the distributor within ten (10) days of completion of every week to which it pertains, whether or not the bill pertaining to the exhibition is received by the exhibitor, failing which the exhibitor shall pay the distributor's share along with interest at the rate of 18% p.a. computed on the delayed payment commencing from the stipulated date of payment till the actual date of payment or realization. It is further agreed that the provision of interest shall not mean or entitle the exhibitor to detain the due amount of distributor's share. However, in the event of default by the Exhibitor in payment, the Distributor shall be entitled to recover all dues including (principal amount and interest) through the association of the concerned circuit. Payment is essence of the agreement.' Agreement for the year 2012-13 with M/s UTV Software Communications Limited provides as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (Tri.-Hyd.) has held as follows:- 11. It would be seen from the agreement that the SPE Films is a producer/distributor engaged in the business of production and distribution of films, while the appellant is an exhibitor engaged in the business of exhibition of films and owns/operates a chain of multiplex theatres under the brand name Inox . The exhibitor decides which screens would play the motion picture, the numbers of shows, the show timings and the ticket pricing including the right to decide on a week to week basis, whether or not to continue to exhibit the motion picture. The distributor/producer had granted the exhibitor the non- exclusive license to exploit the theatrical rights of a motion picture and each party was entitled to conduct its business in its absolute and sole discretion. It was further made clear in the Agreement that either of the party shall not interfere or otherwise absolute influence any decision of the other party in respect of the conduct of its business. 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 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Satyam Cineplexes Ltd. 14. What also needs to be noticed is that if the appellant was providing such a service, it would be the producers/distributors who would be making payments to the appellant, but what comes out from a perusal of clause 5.1 of the Agreement is that in consideration for the distributor agreeing to grant to the appellant the license to exploit the theatrical rights of a motion picture, the appellant would have to pay such revenue share to the distributor as provided for in the said clause. In fact, clause 3.1 of the Agreement provides that distributor agreed to grant to the Appellant the non-exclusive license to exploit the theatrical rights of a motion picture during the term. 15. This issue had come up for consideration before a Division Bench of the Tribunal in PVS Multiplex India. The Bench observed that 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 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 Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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