2014 (4) TMI 686 - AT - Service Tax

Waiver of pre-deposit of tax - Projection theatre under the category of Renting of Immovable Property - Held that - Section 65(90a) of Finance Act, 1994 renting of immovable property includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course of furtherance of business and commerce. Explanation 1 of the said definition provides that for the purpose of this clause for use in the course or furtherance of business or commerce includes use of immovable property as factories, office building, warehouse, theatres, exhibition halls and marriage halls and multiple use building. In the present case, prima facie, we find that the project theatre was let out for screening of films, which would be included in the definition of Renting of Immovable Property - Conditional stay granted.

Summary

Issues Involved:
Whether the applicant is liable to pay service tax on the charges for leasing out the 'projection theatre' under the category of 'Renting of Immovable Property'.

Analysis:
The judgment by the Appellate Tribunal CESTAT CHENNAI involved the issue of determining the liability of the applicant to pay service tax on charges for leasing out a 'projection theatre' under the category of 'Renting of Immovable Property'. The applicant sought a waiver of pre-deposit of tax amounting to Rs.3,06,601/- along with interest for a specific period. The learned Consultant for the applicant argued that the applicant's projector was used for screening films, and the charges were for projection services, not rent. On the other hand, the learned Authorised Representative for the Revenue contended that the applicant, as the owner of the 'Projection Theatre,' leased it out for film screenings, with rents being recorded as Projection Charge Receipts.

Upon reviewing the arguments and the relevant provisions of the Finance Act, 1994, particularly Section 65(90a), the Tribunal considered the definition of 'Renting of Immovable Property.' The Tribunal noted that renting of immovable property includes various arrangements for use in business and commerce. Explanation 1 of the definition clarified that using immovable property for specific purposes, such as theatres, falls under 'Renting of Immovable Property.' In this case, the Tribunal found that the projection theatre was leased for screening films, falling within the definition. The Tribunal agreed with the Authorised Representative that the charges were shown as projection charges, indicating a leasing arrangement. As a result, the Tribunal directed the applicant to deposit a specified amount within a set period, with the balance amount waived pending the appeal process.

In conclusion, the judgment resolved the issue by determining that the applicant was liable to pay service tax under the category of 'Renting of Immovable Property' for leasing out the 'projection theatre.' The decision was based on the interpretation of relevant legal provisions and the specific nature of the transaction, leading to the directive for a partial deposit and waiver of the remaining amount during the appeal period.