Commissioner Of Central Excise & vs M/S. Inox Leisure Ltd

[Arising out of Order-In-Appeal No. 181(VC)ST/JPR-1/2013 dated 28.10.2013 passed by Commissioner of Customs & Central Excise (Appeals), Jaipur]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Commissioner of Central Excise & Appellants

Service Tax Jaipur I

Vs.

M/s. Inox Leisure Ltd. Respondent

Appearance:

Shri Somnath Shukla, Advocate for the Appellants

Shri R Khanna, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 24.08.2015

ORDER NO. FO/52707 /2015-ST(SM)

Per Ashok Jindal :

Revenue is in appeal against the impugned order wherein input service credit on the services namely, manpower supply, security services, professional service, courier services, rent-a-cab services and cleaning services were allowed by the learned Commissioner (Appeals) holding that these services are related to advertisement agency service, which is output service of respondent.

2. The brief facts of the case are that the respondent is a multiplex cinema hall and providing services namely, advertisement agency service and movie theater operation service during the period 1.7.06 to 30.9.2009. The advertisement agency service is a taxable service and movie theatre operation service is an exempt service. As the respondent has not maintained separate accounts for inputs service, therefore, input service credit was denied to the respondent, as the respondent has not maintained separate accounts for inputs service, therefore, it was alleged that all the input services mentioned in para 1 hereinabove have been wrongly availed by the respondent for providing output service, namely, movie theatre operation service, which is an exempt service. In these set of facts, respondent is not entitled to cenvat credit on the above mentioned input service credit and therefore, a show cause notice was issued to the respondent to deny the cenvat credit. On adjudication by the adjudicating authority, the demand of service tax was confirmed against the respondent by denying the input credit service and interest and equivalent amount of penalty was imposed. On appeal before learned Commissioner (Appeals) filed by the respondent, the learned Commissioner (Appeals) held that these are input services availed by the respondent for providing output services, namely, advertising agency service are entitled for cenvat credit. Aggrieved from the said order, Revenue is before me.

3. The learned AR appearing for the Revenue, submits that services are in the nature of exempt services and they are used by the respondent exclusively for movie theatre operation services. Therefore, they are not entitled to avail cenvat credit. He further submits that as these services have been used by the respondent exclusively for providing exempted output services, they are not entitled to take cenvat credit.

4. On the other hand, learned Counsel for the respondent submits that the input services on which the cenvat credit has been denied have been availed by the respondent for providing services, namely, advertisement agency service and they have explained their usage for providing output taxable service to the adjudicating authority. Therefore, the learned Commissioner (Appeals) has rightly allowed input service credit to them.

5. Heard the parties. Considered the submissions.

6. In this case, the short issue before me is whether the input service credit sought to be denied to the respondent is used by the respondent exclusively for providing movie theatre operation service or advertisement agency service. The respondent has explained the usage of the services which is being reproduced hereinunder:

Nature of Input service

How connected with earning of advertisement income Manpower Supply Service Only part of the duties performed by Outsourced staff has been listed by Department. The outsource staff also takes care of advertisement schedule i.e. display the requisite poster, standee etc. at appropriate time at appropriate place. They interact with Advertisers for obtaining appropriate material for display.

Security Services The security is responsible for security of all properties at the Multiplex including LCD screens on which advertisements are displayed, poster case, product display etc. They also monitor movement of advertisement material including the analogue and digital prints for onscreen display of advertisements. Professional Fees The Theatre complex is also utilized for display of advertisements

Courier Services Courier service is extensively used for advertisement business in movement of both administrative documents such as release orders. Bills etc. and movement of advertisement material i.e. posters, display material, analogue films etc. as per creatives. Rent a cab In fact these are more used for administrative activities related to advertising such as meeting clients for negotiations etc.

Cleaning services The housekeeping team takes care of both theatre and advertisement displays, LCDs etc.

Professional Fees The Theatre complex is also utilized for display of advertisements.

7. On analyzing the usage of these services, it is clear that these services have been used by the respondent for advertisement agency service. In these circumstances, it cannot be held that respondent has used the above mentioned services exclusively for providing movie theatre operation services. In these circumstances, the learned Commissioner (Appeals) has rightly allowed cenvat credit to the respondent. Therefore, I do not find any infirmity in the impugned order. Appeal filed by the Revenue is dismissed.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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