9911796707
TMI Blog2024 (4) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Advance Ruling order No. KAR ADRG 30/2023 Dated: 15.09.2023. BRIEF FACTS OF THE CASE: 3. The Appellant is into the Exhibition of Movies in theatres, wherein the Appellant takes the theaters on lease and operates the theaters. The Appellant collects the GST on the value of the tickets classifying the service under SAC 998554. The Appellant has the intention to diversify the business, by entering into Licensing services for the right to broadcast and show original films, sound recordings, radio and television programmes etc. Hence, the Appellant sought from the Advance Ruling Authority, the correct classification of the Appellant's proposed service of Licensing services for the right to broadcast and show original films, sound recordings, radio and television programmes etc. The Advance Ruling Authority vide impugned Order No. KAR ADRG 30/2023 dated 15.09.2023 has given a Ruling relating to classification of licensing services of distribution of rights to exhibit the film by the distributor to the exhibitor and classified under SAC 999614. 4. The Appellant has filed this appeal stating that the said ruling is totally tangential or divergent to the plea or prayer of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lassification not prayed for at all. Hence the said Ruling by the Authority for Advance Ruling amounts to miscarriage of Justice and hence not sustainable in law. d) Now the question arises is whether any authority can grant the relief beyond prayer? According to the settled position of law, there is no provision or inherent power that authorizes the courts or any authorities to grant relief that is explicitly not requested by the Appellant. II CONSCIOUS AND DELIBERATE OMISSION OF THE EXCLUSION CLAUSE IN THE EXPLANATORY NOTES AFTER REPRODUCING THE SAME AND NOT GIVING ANY FINDING OR EVEN CONSIDERING EXCLUSION CLAUSE OF 999614 a) At para 8 of the impugned order, the said Ruling the Hon'ble Authority for Advance Ruling is very much aware that the Appellant had sought the advance Ruling in respect of classification on the intended service which falls under Licensing services for the right to broadcast and show original films sound recordings, radio and television programme etc, and hence it falls under SAC 997332 b) Thereafter the Hon'ble Authority for Advance Ruling reproduces the Explanatory notes both in respect of SAC 997332 as well as SAC 9976. c) At para 10 of the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under 997332 be upheld. IV. THE HON'BLE AUTHORITY APPEARS TO HAVE PREMEDITATED AND PREDETERMINED TO DEVIATE FROM THE PRAYER OF THE APPELLANT SO AS GIVE AN INCORRECT AND ERRONEOUS RULING a) That after going through the impugned Ruling passed by the Hon'ble Authority, would come to conclusion that there has been definitely a deviation from the Ruling prayed for and that of the Ruling given. b) Further, it appears that the Hon'ble Ruling Authority tries to distinguish between the Exhibition and Broadcasting and again appears to commit an error, stating that the exhibitor in the instant case merely exhibits the film in a theatre but does not broadcast the said original film and show it and again comes to an erroneous conclusion-that SAC 997332 is not appropriate and applicable to the prayer in the instant case. As per the understanding and to make the issue clear, it is submitted that the Movies are now typically played on large screens in movie theatres using a digital projector. The projector takes a digital continue reading and the theatres play a file known as a DCP, this file is created by the distributor for the theatres. From a plain reading, it appears that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... license is given to the exhibitors to broadcast and show original films and therefore their activity clearly fits into this definition, whereas SAC 9996, the heading relates to "Recreational, Cultural and sporting Services". The sub headings relate to audio visual related services, performing arts and other live entertainment, performance by artists, museum and preservation services, services of athletes and related support services, amusements, etc. therefore according to our firm opinion the classification under SAC 997332 is most specific and appropriate and is accordance with the classification of services under GST. f) Therefore, it follows that the classification of the services will be under the heading to that service to which they are most akin and Specific. From the above we are of the firm opinion that film distribution comes under 997332 since we give license to the exhibitors to broadcast and show original films. The Appellant's activity clearly fits into this definition and is very Specific to 997332. Whereas SAC 9996 the heading relates to "Recreational, Cultural and sporting Services" The sub headings relate to audio visual related services , performing arts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration and qualifies for dismissal. PERSONAL HEARING 6. The Personal Hearing was held on 08.02.2024, which was attended by Shri. V.R. Balasubramani, Advocate for the Appellant. He reiterated the contents of their Grounds of Appeal and he submitted a written submission, by email. In the written submission, they briefly stated the grounds of appeal. During the personal Hearing, the Advocate informed that they have not entered into any agreement for the proposed services. However, he stated that they will furnish a proposed agreement shortly. Accordingly, they submitted a draft Agreement for Exhibition of Original Films, vide email dtd. 22.02.2024. DISCUSSIONS AND FINDINGS 7. We have gone through the entire case records including all the written as well as oral submissions made by the Parties. We have also examined the impugned order No. KAR ADRG 30/2023 dtd. 15.09.2023 passed by the Authority for Advance Ruling in Karnataka. On careful consideration of the same, the issue to be decided is whether the order passed by the Authority for Advance Ruling is just and proper under the circumstances or needs any interference. 8. In the grounds of appeal, the appellant has argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is necessary, one being the licensing stage and the other being the Leasing stage. To elaborate on this point, Licensing services are those where the owner of the rights in the specified works, assigns' another person called the distributor, which is precisely the classification sought by the Applicant in the prayer at the first stage. Thereupon, the distributor merely leasing only the rights to exhibit and therefore these rights are not transferred, but only given or agreed to the exhibitors to exhibit the films or programmes, which is the second stage. 11.1 However, in the Application for Advance Ruling and also Grounds of Appeal (para VI) they have furnished copies of some invoices of Distributors to Theatres and claimed the said service in their support, indicating that they are also venturing into Distribution Services and they need classification of the said distribution services. During the course of hearing held on 08.02.2024, the applicant was informed that the Advance Ruling can only be given when the supply of goods/ services sought to be undertaken or proposed to be undertaken by the applicant is clear. It was observed that the invoices which were submitted to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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