TMI Blog2014 (7) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... actually collected by the appellant from the franchisee ought to have been made part of the taxable value of the ‘Franchise Service’ for the period of dispute - Prima facie case not in favour of assessee - stay granted partly. - ST/2571/2010 - Stay Order No. 1547/2012 and Misc. Order No. 677/2012 - Dated:- 5-9-2012 - Shri P.G. Chacko, Member (J) and M. Veeraiyan, Member (T) Shri V. Raghuraman, Advocate, for the Appellant. Shri Ganesh Haavanur, Advocate, for the Respondent. ORDER The miscellaneous application filed by the appellant seeks to bring on record certain documents which are undisputedly documents referred to in the past proceedings. The application also prays for incorporation of certain additional grounds in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y salary, wages and statutory dues were fastened on the franchisee. The agreement further stipulated that franchisee shall pay royalty to the franchisor at the rate of 15% of the gross turn-over on or before the sixth day of every succeeding month failing which the agreement would be terminated by the franchisor without assigning any reason. This agreement also referred to original agreement dated 4-7-2005 with Mr. Savan Kumar. The agreement dated 7-11-2010 was purportedly in continuation of the original agreement dated 4-7-2005. This agreement also made the registration fee non-refundable and further stipulated that the franchisee should collect service tax on all course fees collected from the students. 4. The learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utrality in the context of opposing invocation of the extended period of limitation. In this connection, it is submitted that the franchisee, even according to the agreement, was liable to pay all statutory dues including service tax on Commercial Training or Coaching Service , in which event service tax would have been payable on the entire amount of fees collected from the students. 5. We have heard the learned Addl. Commissioner (AR) also who vehemently contests the submissions made by the learned counsel. It is submitted that the so-called royalty was collected by the appellant from the franchisee in relation to Franchise Service and hence should have been included in the taxable value for the payment of service tax. It is submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 481 (S.C.)]. 6. We have given careful consideration to the submissions. Prima facie, the appellant is liable to include the so-called royalty as part of the taxable value of Franchise Service . It has been claimed by the learned counsel that the royalty was collected by the franchisor from the franchisee as part of a profit sharing arrangement, which argument does not appeal to us inasmuch as the royalty is the only consideration specifically mentioned in the relevant agreement as consideration to be paid by the franchisee to the franchisor. In this view of the matter, the royalty referred to in the agreement and actually collected by the appellant from the franchisee ought to have been made part of the taxable value of the Franchise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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