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TMI Blog1998 (9) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... e case and on a true and correct interpretation of section 2(10) of the Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985, was the Tribunal justified in law in holding that the charges received for background music recording of Andha Yudh and for which invoice No. 87/88/613 dated March 29, 1988 was issued by the respondents is not a transaction of sale liable to tax under the said Act? (iii) Whether, on the facts and in the circumstances of the case, and on a true and correct interpretation of section 2(10) of the Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985, was the Tribunal justified in law in holding that the charges received for songs dubbing done for the picture Parbat Ke Uspar and for which invoice No. 87/88/620 dated March 31, 1988 Has seen issued, is not a transaction of sale liable to tax under the said Act? These three questions arise out of the common order of the Tribunal in six appeals of six different assessees. As the facts and circumstances of all these cases as also the legal issues involved are common, the Tribunal disposed of all the six appeals by a common order and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order installed in the studio to produce a sound track negative which has to be subsequently developed in a film processing lab-oratory and matched with the picture negative to produce the final release print with the sound. In the recording and re-recording studios there are separate compartments for various purposes. The main hall is meant for musicians to sit with their musical instruments. The control room consists of mixing console and speakers which are embedded to the earth. In the machine room, recorder and projector are embedded to the earth. At times singer has a separate room. Optical sound recorder is embedded to the earth in other room. There is a power room consisting of sesym motors and rectifiers. The film producers hire the studios for recording music and pay for the same. This is common in all cases. In addition to this activity, the assessees also have minitheatres which they give on hire for exhibiting films to the distributors. Studios for shooting films fully equipped with all instruments are also given on hire for shooting films. The, assessees also give editing machines on hire to the film producers for editing the film before they are exhibited. Those editi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue has not challenged the finding of the Tribunal in regard to the hiring of the mini-theatres for exhibiting unreleased films to the distributors and hiring of studios for shooting of films which is in favour of the assessees. Revenue has challenged the finding of the Tribunal only in so far as it relates to the hiring of studios for recording of music and background music and dubbing of film music is concerned. 4.. We have heard Mr. N.T. Saraf, learned counsel for the Revenue, who submits that the Tribunal was wrong in holding that the hiring of the studios for recording songs and background music and dubbing sound did not amount to sale within the Meaning of clause (10) of section 2 of the Act. According to him, the charges received by the assessees for hiring of the studios for the above purposes would be taxable under the provisions of the Act. The learned counsel further submits that though the charges are claimed to be charges for hiring of studio for the above purposes, in effect and in reality, they are charges for hiring of the various music equipments and instruments required for recording of songs, background music, etc. According to the learned counsel, the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hiring of mini-theatres and studios for shooting films in which cases the Tribunal itself has held that the charges do not fall within the purview of the Act, 6.. We have carefully considered the rival submissions in the light of the relevant provisions of the Act. The said Act was enacted to levy and collect tax on the transfer of the right to use any goods for any purposes for valuable consideration in the State of Maharashtra. Sections 3 and 4 of the Act deal with the incident and levy of tax. Section 3 provides that subject to the provisions contained in this-Act, tax shall be leviable on the turnover of sales in respect of (i) the transfer of right to use any goods agreed to before the appointed day but the right to use is exercised on or after the appointed day, (ii) the transfer of right to use any goods agreed to prior to the appointed day, and wherein the right to use has been continued after the appointed day, to the extent of the sale price received or receivable in respect of such use on or after the appointed day and (iii) the transfer of right to use any goods agreed to on or after the appointed Jay. The appointed date was notified to be 1st October, 1986. Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appliances. 4.. The transfer of the right to use air-conditioning equipment, airconditioners, deep freezers, cold storage plants, humidification plants or dehumidifiers. 5.. The transfer of the tight to use vehicles, such as trucks, tractors, buses, mini buses, jeeps, cars or three-wheelers. 6.. The transfer of the right to use aircrafts, ships, boats or vessels." By notification dated March 18, 1988, the following item was inserted as item No. 7: "7. The transfer of the right to use the goods on incorporeal or intangible character, that is to say, (a) Patents, (b) Trade marks, (c) Import licences." By another notification dated 29th March, 1994, the following four more items were inserted: "8. The transfer of the right to use all kinds of machinery. 9.. The transfer of the right to use all kinds of furniture. 10.. The transfer of the right to use all kinds of music systems. 11.. The transfer of the right to use software." The reference before us pertains to period prior to March 29, 1994. 7.. It is clear from the perusal of the above provisions of the Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985 that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneficial enjoyment of that to which it is attached. 9.. It is clear from the above definitions that if any property is embedded to the earth or attached to the earth in a manner essential 'for the beneficial user of the immovable property, it would be an immovable property. The real criteria to examine whether a property is movable property or immovable property is whether the movable property which is embedded or attached to the earth can be used without so attaching and the attachment is only for the proper and smooth functioning of particular movable property or equipment or it is for the beneficial user of the immovable property. If a thing is embedded to the earth or attached to what is so Embedded for the permanent beneficial enjoyment of that to which it is attached, then it is part of the immovable property. On the other hand, if the attachment is mainly for the beneficial enjoyment of the movable property itself, then it remains movable property even though fixed for the time being for proper enjoyment thereof. In the instant case, there can be no dispute about the fact that the recording of songs, background music and dubbing of sound can be done only in studios whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arth for the purpose of working his factory as a press, it should be taken to come within the definition of "immovable property". The same analogy will apply to a studio. In the instant case the Tribunal itself has held that the lease of the studios with equipments, arrangements, etc., in the exteriors to shoot their films and the mini theatre for exhibiting the films would not amount to sale within the meaning of section 2(10) of the Act. The same analogy, in our opinion, would apply to the studios for recording, re-recording and dubbing of background music. 11.. We may now turn to the alternate submission of the learned counsel of the assessee that the equipments for, recording music, background music and for sound dubbing do not fall in any of the items of the Schedule as it stood at the material time and even under the items added thereafter and, therefore, even if there is a transfer of the right to use those instruments, such transaction would not be covered by the provisions of the Act. According to the Revenue, these items fall under entry 3 of the Schedule which refers to transfer of right to use plant, machinery, equipment, including office equipment, computers, instr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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