2015 (11) TMI 347 - AT - Service Tax

Cenvat Credit - eligible input services - whether the input service credit sought to be denied to the respondent is used by the respondent exclusively for providing movie theatre operation service or advertisement agency service - input service credit on the services namely, manpower supply, security services, professional service, courier services, rent-a-cab services and cleaning services - Held that - Services have been used by the respondent for advertisement agency service. In these circumstances, it cannot be held that respondent has used the subject mentioned services exclusively for providing movie theatre operation services. In these circumstances, the learned Commissioner (Appeals) has rightly allowed cenvat credit to the respondent. Therefore, I do not find any infirmity in the impugned order. - Decided against Revenue.

Summary

Issues:
Input service credit denial for advertisement agency service and movie theatre operation service.

Analysis:
The case involved a dispute over the denial of input service credit on various services utilized by a multiplex cinema hall providing advertisement agency service and movie theatre operation service. The Revenue contended that since the services were used exclusively for providing exempted movie theatre operation services, the multiplex was not entitled to avail cenvat credit. On the other hand, the multiplex argued that the input services were utilized for providing taxable advertisement agency services and explained their usage to the adjudicating authority. The learned Commissioner (Appeals) allowed the input service credit, leading to the Revenue's appeal.

The Tribunal examined whether the input services were exclusively used for providing movie theatre operation service or advertisement agency service. The multiplex presented detailed explanations regarding the connection between each input service and the earning of advertisement income. The services such as manpower supply, security services, professional fees, courier services, rent-a-cab services, and cleaning services were shown to be integral to the advertisement agency service provided by the multiplex. The outsourced staff managed advertisement schedules, interacted with advertisers, ensured security of advertisement properties, facilitated movement of advertisement material, utilized theatre complex for advertisements, and maintained cleanliness of both theatre and advertisement displays.

After analyzing the usage of the services, the Tribunal concluded that the input services were predominantly utilized for the advertisement agency service rather than exclusively for movie theatre operation services. Therefore, it was held that the multiplex was entitled to cenvat credit on the input services. The Tribunal upheld the decision of the learned Commissioner (Appeals) and dismissed the Revenue's appeal, finding no fault in the impugned order.