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TMI Blog2019 (4) TMI 2043X X X X Extracts X X X X X X X X Extracts X X X X ..... re towards purchase of film rights for screening of the movies have also been reflected in the books of accounts. As per the agreement entered into between the appellant and the distributors/ sub distributors, both the parties have mutually agreed to work together, wherein the appellant being the owner of the theatre is exhibiting the movies provided by the distributors/ sub distributors. However, the copy rights of the film are retained by the distributors themselves. The appellant provides the theatre and other facilities such as arrangement of projector and other related equipments to screen the film. It is found that under this arrangement, both the parties are working for mutual benefit of each other. They are not providing any service to any other party whereas they are providing services to self. Also, the revenue generated by the appellant which is shared by the appellant and the distributors is from the sale of movie tickets to the customers and from this revenue he is also making payment to the distributors in spite of the fact that copy right of exhibiting the movie has not been passed on to him. This purely reflect that a partnership between the distributor and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory returns filed with the department and no service tax has been paid on the same. Accordingly, a show cause notice dt. 15.04.2014 came to be issued where under it has been alleged that the appellant is providing Business Support Service to the various distributors of movies and therefore, the appellant has paid the service tax amounting to ₹ 3,72,02,750/- and has held that the same is recoverable under Section 73(1) of the Finance Act, 1994. The provisions pertaining to demand of interest under Section 75 as well as the provisions pertaining to penalty under Sections 77 and 78 of the Act have also been invoked in the show cause notice. The show cause notice got adjudicated vide order-in-original dt. 08.03.2016 where under the learned adjudicating authority has upheld all the charges and confirmed the service tax amounting to ₹ 3,72,02,750/- under Section 73(1) of the Finance Act, 1994. The interest and penalty provisions have also been confirmed. The adjudicating authority has classified the services under the category of Business Support Service as alleged in the impugned show cause notice. 2. The learned advocate appearing on behalf of the appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d advocate that as per the agreement as mentioned above, both the parties have mutually agreed to work together wherein the appellant being the owner of the theatre is exhibiting the movies and the distributor being the right holder for the particular movies is providing and facilitating the screening of the movies. Under the agreement, it can be seen that both the parties are working for mutual benefit to each other and they are not providing the service to any one whereas they are providing the service to self. The income is earned in the form of gross box office collection earned from screening of the movies. The revenue shared after deduction of various expenses as per the revenue sharing percentage decided by the appellant and the distributor as per the agreement. Thus, the learned advocate has tried to impress upon that the activity of screening of the film by the appellant is not a service to anybody and it is a service to self and therefore, this activity cannot be put service tax under the category of Business Support Service. It is further being impressed that the appellant has duly recorded the gross collection of screening of the films as income in their books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/2018-CU[DB] dt. 27.06.2018 and PVS Multiplex India Pvt Ltd vs. CCE ST, Meerut-I - Final Order No. ST/A/71279/2017-CU[DB] dt. 29.08.2017. 3. On the other hand, the learned A.R. reiterates the findings in the impugned order-in-order. 4. We have heard rival submissions made by both the sides and perused the records of the appeal. 5. After careful consideration of the submissions made by both the sides and on perusal of the records of the appeal, we find that the appellant has been screening various films in their multiplex on behalf of the film distributors such as Mukta Arts Limited, PVR Pictures Ltd, UTV Software Communications Ltd, Reliance Big Entertainment Pvt Ltd etc. As per the agreement entered into by the appellant and the various distributors/ sub distributors, the revenue generated from the selling of the tickets of movies was shared between the appellant and the various distributors in percentage terms as under: Distributor‟s share @ 50% for 1st week Distributor‟s share @ 42.5% for 2nd week Distributor‟s share @ 37.5% for 3rd week Distributor‟s share @ 30% for 4th and subsequent week/s All the revenue receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not from the distributors/ sub distributors. The distributor has also not passed on the copy right to the appellant, therefore, we feel that there is no relevance of the above circular in the present case and we find that in such an arrangement there is no service element from the appellant to the distributor or sub-distributor. We also feel that the issue is no longer res integra as it has been already decided by this Tribunal in the case of PVS Multiplex India Pvt Ltd vs. CCE ST, Meerut-I (supra). Relevant extract of the said judgment is as under: 6. Having considered contentions and on perusal of 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 Revenue Sharing Basis, which is undisputed finding recorded by the Ld. Commissioner in the impugned order. Accordingly, we hold that the appellant is not liable to pay service tax for screening of films and payments to distributors in their theatre. We also take notice that the appellant have disclosed the gross amount received from sale of tickets or exhibition of films in their profit and loss account on the credit side and have shown the am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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