TaxTMI 
TaxTMI 
2016 (1) TMI 850
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....igning Fees' and duty of Rs. 4,98,988/- for the period 1.1.2005 to 31.3.2006 demanded in the show cause notice dated 6.10.08 for Architect services. The amount deposited alongwith interest for the Architect services was appropriated. Payment of interest and penalties under Section 76, 77 and 78 were also imposed. The appellant are in appeal against the said order of the Commissioner. 2. We find in this case that two show cause notices dated 6.10.2008 and 23.07.2009 were issued for the period and for services categories as shown in the table below: SCN date Period Service category Within Mumbai Outside Mumbai Total Demand 06.10.2008 2003-08 Pouring Fee 63,49,600 (7,22,641) 2,52,86,742 (27,81,983) 3,16,36,342 (35,04,624) Signing Fee 35,00,000 (3,57,000) 1,05,00,000 (9,94,000) 1,40,00,000 (13,51,000) 2003-06 Architect Fees 1,29,42,991 (10,67,091) 23.07.2009 2008-09 Pouring Fee 5,17,808 (64,001) 5,17,808 (64,001) Total Pouring Fee/Signing Fee 98,49,600 (10,79,641) 3, 63,04,550 (38,39,984)....
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....at the transaction is revenue neutral as service tax payable, would be available to them as Cenvat Credit. Therefore no malafide intention can be attributed to invoke the extended time period. 4. Ld. A.R. appearing on behalf of Revenue reiterates the findings of the impugned order. He took us through the Agreement between CCIPL and the appellant. He drew our attention to various clauses in support of the contention that the services rendered by the appellant are squarely covered under Business Auxiliary Service. 5. Heard both sides. 6. We have carefully considered the submissions made by both sides. The issue centers around the Agreements between CCIPL and the appellant. Therefore it is appropriate to reproduce the salient clauses of the Agreement dated 18.2.2003 as below:- 2. Grant of beverage availability and advertising and promotional rights. 2.1.1 INOX hereby grants to CCIPL the right to make Beverages available as listed in Schedule 5 for consumption by INOX through the Outlets in the premises, either as RGB, PET, Can or as Fountain Beverages, at each of the Premises subject to the terms and conditions hereinafter provided. 2.2 INOX here....
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....with the procedure agreed to in that behalf and prescribed in schedule 6 hereof and at the prices specified in Clause 7.4 hereof. 4.2.8 CCIPL shall be entitled to a total of 500 minutes of on-screen advertising time, per screen, per Location, per year. INOX agrees to give, on a weekly basis (Friday-Thursday), the name of the movie in which The Coca-Cola Company advertisement is going to run, two days prior to the commencement of the week. 4.3.4 INOX shall pay to CCIPL, or such other company as may be designated by it, for the supplies of Beverages and/or Concentrates in accordance with the provisions contained in Schedule 7. 4.3.6 INOX shall not within any part of the Premises, sell, stock, display, promote or otherwise make available, or permit to be sold, stocked, displayed, promoted or otherwise available, or enter into any agreement for the same, with the Competition as set out in Schedule 4, any soft or aerated drinks or package drinking water other than those pursuant to this Agreement. Provided that the aforesaid exclusively granted by INOX to CCIPL shall apply only in respect of, but without limitation, to the premises of the Operational Locations....
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....all be released every quarter against claims made by INOX for the Operating Period. From the record, it is apparent that the appellant were providing services to CCIPL and received one time 'Signing fees' and 'Pouring fees' on annual basis from each of the properties i.e. Pune, Vadodara, Bangalore, Mumbai and Kolkata. The show cause notice admits this. Only because the 'Pouring fee' from all properties/locations was included in the Balance Sheet of the appellant in a consolidated manner under the income Head i.e. food and beverages, the DGCEI issued the demand show cause notice answerable to Commissioner of Service Tax, Mumbai demanding service tax on the fees collected from each location. It is not disputed that each of the locations had separate Service Tax registration. It is also not disputed that the services were provided by the appellant from a Multiplex in each location individually. Therefore there is merit in the contention of the Ld advocate that the Commissioner of Service tax has no jurisdiction to adjudicate the case in respect of services received beyond jurisdiction. The finding in the impugned Order does not address this issue appropriate....
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....swerable to the jurisdictional Commissioners or he should have written to the Central Board of Excise and Customs seeking power to adjudicate the case of services rendered pan India just as DGCEI has the power to issue the show cause notice on pan India basis. 8. The Commissioner's reliance on the case of Nokia (India) Pvt. Ltd. (supra) is misplaced. In the case of Nokia, the facts were different. There it was held that, on being show caused, a person could not insist that they be issued show cause notice from all the various places from where it rendered its services. The facts were that services were being provided from Delhi office, the agreement provided that all notices, demands and other communication be addressed to the Delhi address. Help desk services were provided from Delhi as well as Hardware repair services. In these circumstances it was held that the Delhi Commissionerate had jurisdiction to issue the show cause notice. In the present case the issue is of extra territorial adjudication by the Commissioner. On the issue of extra territorial jurisdiction the Apex Court in the case of Kiran Singh (Supra) held that: It is a fundamental principle well-establis....
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....confirmed beyond the jurisdiction of the Commissioner and, is therefore, set aside as invalid. 9. We may now consider the leviability of service tax on the 'pouring fees' and 'signing fees' received by the appellant within Mumbai jurisdiction. The clauses of the Agreement detailed above clearly show that the signing (Clause 7.1) of Rs. 35 lacs in respect of each location was received by the appellant for promoting products of the appellant by way of signage and panels (clause 4.3.9 of the agreement). Further the appellant were prohibited from selling, stocking, displaying any other soft/aerated drinks that other than those manufactured by CCIPL (Clause 4.3.6). The entire furniture, fixtures and fittings were installed by the CCIPL. As per clause 2, the appellant granted CCIPL the promotional and advertising rights in respect of beverages in the multiplexes and to have prominent signage. All these clauses indicate that the appellant provided the Business Auxiliary Services under Section 65(105)(zzb) read with definition of Business Auxiliary Service under Section 65 (19) (i), by promoting sale of goods provided by the client". 9.1 We do not agree with the Ld. A....
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.... physical case sold of mix syrup to the appellant which shall be placed in a fund titled, 'signage' and screen fund". The fund shall be released every quarter to the appellant against the claims of sale made by the appellant. The appellant is raising periodical invoices on CCIPL for the 'pouring fees'. Therefore we hold 'pouring fees' to be consideration received for providing BAS to CCIPL. 10. Above discussion on the basis of the Agreements leaves no room for doubt to hold that the appellant provided BAS to its client CCIPL on which tax is payable. However, we agree with the appellant that the service tax on import of 'Architect Services" attracts levy of service tax only from 18/4/2006 onward. We need not dwell on this issue that service tax on import of services is payable by the recipient of the service under Section 66 (A) only w.e.f. 1/5/2006 when the Section 66(A) was brought into effect. This is the settled legal position as held by the Hon'ble Mumbai High Court in the case of Indian National Ship Owners Association (supra). 11. On the issue of invocation of extended time period for part of the demand for period prior to one year before....