Dr. Chittaranajan Satapathy, Technical Member. - Heard both sides.

2. The appellants, M/s AVM Film Studios, are a leading Film Producer. Shri N. Rajagopalan, learned Consultant appearing for the appellants states that from the year 2005, the appellants have started letting out the open places and certain common constructed vacant areas within the studio premises on hire for shooting films, TV serials, Advertisement films etc. He further states that apart from letting out the vacant premises, the appellants did not undertake any type of services and only collected the hire charges. According to him, the appellants had no interest nor in any way connected with the activities of those, who hired their premises and that the vacant studio premises did not have any facility to undertake recording of sound, recording on video, editing, cutting, transmitting or rendering any service connected with the production of films by the hirers.

3. The learned Consultant states that the issue for consideration in this appeal is whether letting out the vacant studio premises during the period 1-4-2005 to 31-3-2007 attracted service tax under the category of "video production agency" falling under section 65(119) of the Act and whether mere letting out the vacant premises amounted to rendering service in relation to video tape production, as defined under section 65(120) of the Act. He states that since the appellants did not render any of the technical services involved in video production and only rented the premises, they are not liable to pay service tax for the impugned period.

4. Heard the learned Jt. CDR Shri V.V. Hariharan, who supports the impugned order.

5. After hearing both sides and perusal of the case records, we find that the period in dispute is from 1-4-2005 to 31-3-2007. The relevant statutory definitions and provisions during the material period as submitted by the learned Consultant are as under: -

"Section 65(119) "video production agency" means any professional videographer or any person engaged in the business of rendering services relating to video-tape production;

Section 65(120) "video-tape production" means the process of any recording of any programme, event or function on a magnetic tape and includes editing thereof, in any manner.

The definition of Video tape production' was substituted with effect from 16-6-2005, by the Finance Act, 2005.

With effect from 16-6-2005, the definition of Videotape production' is as follows:

"Video-tape production" means the process of any recording of any programme, event or function on a magnetic tape or on any other media or device and includes services relating thereto such as editing, cutting, colouring, dubbing, title printing, imparting special effects, processing, adding, modifying or deleting sound, transferring from one media or device to another, or undertaking any video post-production activity, in any manner".

Taxable service under section 65(zi) is any service provided or to be provided to any person, by a video production agency in relation to video-tape production, in any manner.

The words 'to a client' was substituted with effect from 16-5-2008 to read as 'to any person'."

6. We find that the authorities below have placed reliance on Board's Circular F.No. B-II/1/2000-TRU dated 9-7-2001. Annexure-X of the Circular relates to Video Tape Production Service'. In para 2 thereof, it is stated that the scope of taxable service covers any service in relation to video tape production in any manner. This clarification issued by the Board does not appear to be in consonance with the definition of video tape production which only includes services such as editing, colouring, dubbing etc. which are specified. In other words, the definition of the video tape production in the statute refers to only technical aspects of video tape production service whereas, the clarification contained in the Circular dated 9-7-2001 includes any services in relation to video tape production in any manner. It