Appellant not liable for service tax on film screenings; compliance on rental services post specified date.

The Tribunal held that the appellant is not liable to pay service tax for screening films and payments to distributors in their theatre. Regarding renting/business support service, the Tribunal found no issue with the appellant's compliance post a specified date. A minor issue of a differential tax demand was remanded for proper reconciliation. The appeal was allowed in part and remanded in part, with directions to reconcile accounts, pay outstanding tax amounts if applicable, and provide necessary calculations for the differential tax demand. The appellant was entitled to consequential benefits, and the amount deposited under a specific scheme was duly acknowledged and appropriated.

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Issues:
1. Liability to pay service tax on the screening of films in the multiplex.
2. Liability to pay service tax under the head renting of immovable property.

Analysis:
1. Liability for Screening of Films:
The issue revolved around whether the appellant is liable to pay service tax on the screening of films in their multiplex and payments to distributors. The Tribunal noted that the appellant operated their cinema theatre in collaboration with a film distributor on a revenue-sharing basis. The appellant retained a part of the income in lieu of exhibiting movies, as per agreements with the film distributors. The Tribunal referred to a CBEC Circular stating that where the arrangement is on a principal-to-principal basis, the distributor is liable to pay service tax. Consequently, the Tribunal held that the appellant is not liable to pay service tax for screening films and payments to distributors in their theatre.

2. Renting/Business Support Service:
Regarding the renting/business support service, the appellant explained that they had deposited 50% of the service tax amount prior to a specified date under a stay order granted by the Supreme Court. However, for the period after the specified date, there was no stay, and the appellant was paying regularly without dispute. The Tribunal acknowledged this submission and found no issue with the appellant's compliance post the specified date.

3. Differential Tax Demand:
A minor issue arose concerning a differential tax demand of a specific amount due to a variance in accounting methods between receipts (cash basis) and financial accounts (accrual basis). The appellant requested a remand for proper reconciliation. The Tribunal agreed and remanded the matter back to the Adjudicating Authority for reconciliation and directed the appellant to provide calculations for consideration in accordance with the law.

In conclusion, the appeal was allowed in part and remanded in part. The Tribunal directed the appellant to reconcile accounts, pay any outstanding tax amounts if applicable, and provide necessary calculations for the differential tax demand. The appellant was entitled to consequential benefits, and the amount deposited under a specific scheme was duly acknowledged and appropriated in the impugned order.

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