TaxTMI 
TaxTMI 
2026 (9) TMI 1842
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (105) of section 65 of the Finance Act, 1994. 2. A show cause Notice bearing DGCEI F. NO: 179/ KZU/ KOL/ST /Gr. A/12/21741, dated 16.04.2013 was issued to the Appellant proposing to demand Service tax amounting to Rs.13,20,044/- including cesses for the period 01.10.2007 to 28.02.2013, in terms of the proviso to section 73(1) of the Finance Act. 1994, along with interest under section 75 of the Finance Act, 1994. Penalties have also been proposed under various sections of the Finance Act. 2.1. The said Notice was adjudicated and the Ld. Adjudicating authority has confirmed the demand of service tax along with interest and penalties. On appeal, the Ld. Commissioner (Appeals) upheld the demands confirmed in the Order-in-Original vide t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rs coming at the bar cum restaurant of the Appellant and raising bills and charged VAT on the full amount of bill. The WEC are using the said bar cum restaurant jointly with the Appellant and as per agreement entered into, they are paying 23% of the sale amount to the Appellant. Thus, the Appellant submits that the arrangement between them is in the nature of 'Revenue sharing' and no service tax element involved in the said transaction. Accordingly, the Appellant submits that the demand of service tax confirmed in the impugned order under the category of 'Business Support Service' is not sustainable. In support of their contention, the Appellant relied upon the decision of the CESTAT, Principal Bench, New Delhi in the case of AMBIENCE HOSPI....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... alcoholic beverages and hence the demand has been confirmed under the category of 'Advertisement Service'. Thus, he supported the demands confirmed in the impugned order. 6. Heard both sides and perused the appeal documents. 7. We observe that the Appellant has entered into an Agreement with WEC and as per the Agreement, WEC has been maintaining the kitchen and other facilities for preparing, serving and selling foods to the customers visiting Sagar Bar & Restaurant. As per the Agreement, the Appellant has received 23% of the sale amount. The Appellant have recorded the said amount received as License and Facility Charges and the department has considered the receipt of this amount as consideration towards rendering of 'Business Supp....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., on revenue sharing basis, as per the terms and conditions of the agreement between them. For ready reference, the relevant provision of the Agreement evidencing that the agreement entered is in the nature of Revenue Sharing is extracted below: ⮚ Sagar shall be entitled to 23% of the net turnover of WEC in Sagar Restaurant as license and facility charges for the rights and licenses conferred on WEC by them; 7.3. The above provision of the agreement makes it clear that the agreement between WEC and the Appellant is of Revenue sharing basis. Once the Agreement is considered as a 'Revenue Sharing' agreement, then there is no service element involved in it. We find that a similar issue has been clarified by Board in respect ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cts and circumstances of the present case also. Thus, we hold that there is no service element involved in this agreement as it is a 'Revenue sharing' arrangement and hence the amount received is not liable to service tax under the category of BSS. 7.4. We find that the same view has been taken by CESTAT, Principal Bench, New Delhi in the case of AMBIENCE HOSPITALITY P. LTD Vs. COMMISSIONER OF C. EX., DELHI-IV reported in 2019(21) G.S.T.L. 400 (Tri. - Del), wherein the Hon'ble Tribunal in para 19 has held - 19. Having considered the rival contentions and on perusal of records, we are satisfied that the appellant has been running the club by way of Joint Venture with AMPL, on principle to principle basis. This is evident from fir....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has received this amount towards advertisement / display of alcoholic beverages belong to UB Group in the restaurant, as it amounts to sales promotion of the products belonged to UB Group. We find that the said amounts received by the Appellant represent sales incentive in the form of stock received as well as in the form of cash from different distributors of UB Group, based on the volume of sales in terms of specific agreement. We observe that the activity carried out by the Appellant is not providing sale of space or time for advertisement service, which they cannot undertake since the advertisement of alcoholic beverages is banned in India from 2000. Further, it is evident from the agreement that the said amount represents only incenti....