2023 (5) TMI 80 - AT - Service Tax

Levy of service tax - renting of immovable property service - demand on the ground that by way of the agreements with the distributor appellant has rented its theater for screening films - HELD THAT - From the decision in M/S. MOTI TALKIES VERSUS COMMISSIONER OF SERVICE TAX, DELHI I 2020 (6) TMI 87 - CESTAT NEW DELHI the apparent facts of that case are that The appellant is the owner of a cinema hall situated at Chandni Chowk, New Delhi and is engaged in the business of exhibiting films in its theatre. The copy right over the films is owned by the distributors. The appellant enters into agreements with the film distributors to obtain such copy rights under which the right to exhibit the films is transferred to the appellant, either temporarily or in perpetuity, depending upon the nature of the agreements between the parties. The perusal is sufficient to hold that the facts of the present appeal are identical. Perusal is sufficient to accept the contention of the ld. Counsel for the appellant that the order under challenge in that case is verbatim to the order in appeal in the present case - The Hon ble Bench while adjudicating the said issue has 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 for such service provided or to be provided by him. The appellant is not receiving any payment from the distributor and, therefore, no service can be said to have been provided by the appellant. The demand in the present case alongwith the penalty imposed is held to be liable to be set aside - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are related to the demand of service tax from the appellant under renting of immovable property service based on agreements with film distributors. The penalties imposed under various sections of the Finance Act 1994 are also in dispute.

Summary:

Issue 1: Demand of service tax under renting of immovable property service
The appellant, the owner of a cinema hall, entered into agreements with film distributors. Three show cause notices were issued demanding service tax for different financial years. The Original Adjudicating Authority confirmed the proposal, which was upheld by the Order-in-Appeal. The appellant appealed to the Tribunal, arguing that previous tribunal decisions supported their case. The Tribunal reviewed the facts and previous decisions, including the case of Moti Talkies, where it was established that no service was provided by the appellant to distributors. The Tribunal found the facts of the present case identical to Moti Talkies and set aside the demand and penalties imposed.

Issue 2: Penalty imposed under various sections of the Finance Act 1994
Penalties were imposed on the appellant under different sections of the Finance Act 1994. The appellant sought relief based on previous tribunal decisions. The Tribunal, after considering the facts and legal provisions, set aside the penalties along with the demand for service tax. The Tribunal's decision was based on the lack of service provided by the appellant to the distributors, as established in previous cases.

This judgment by the Appellate Tribunal CESTAT New Delhi involved the appellant challenging the demand of service tax under renting of immovable property service and penalties imposed. The Tribunal, after reviewing the facts and legal precedents, set aside the demand and penalties, citing the lack of service provided by the appellant to film distributors.