Cinepolis India Private Limited Vs Additional Director General (CESTAT Delhi)
The appeal challenged an order dated 17.08.2020 issued by the Additional Director General of the Directorate General of GST Intelligence, which confirmed a service tax demand of ₹18,84,18,323 under Section 73 of the Finance Act, 1994, along with interest under Section 75 and a penalty of ₹16,45,68,787 under Section 78. The demand related to the sale of food and beverages at counters within cinema multiplexes operated by the appellant.
The appellant operates and manages multiplexes with cinema halls and maintains food and beverage counters selling items such as popcorn, samosas, sandwiches, carbonated drinks, and packaged drinking water. The appellant contended that these transactions constitute pure sales of goods and do not involve the provision of any service. The Department, however, asserted that a service element was involved in the sale of food and drinks at the counters, making the activity taxable as a declared service under Section 66E(i) of the Finance Act.
A show cause notice dated 17.10.2018 was issued by the Directorate General of GST Intelligence proposing demand of service tax with interest and penalties. These proposals were confirmed by the impugned order, which led to the present appeal.
