TMI Blog2014 (8) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... Trading Company as he is not representing M/s Baba Trading Company but MSRTC who is actually undertaking the transportation of the parcels/goods. As per the clarification issued by the CBE & C, classification under business support service will be effective from 01/05/2011 and not prior to that. Thus, as per the department itself, prior to 01/05/2011, there is no liability to pay service tax on the said activity. If a service is classifiable under business support service from a given date and the said service is not carved out of any of the existing services, it cannot be construed that service was taxable prior to that date. In the present case, therefore, the question of levying any service tax on the activity under the category of “f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness. The right granted under the contract was for right to book, deliver, transshipment, handling, loading unloading and transportation of parcels, specified allied services and to carry out the business of courier by the ordinary buses of the licensor from all types of clients including Government, Semi-government, banks and public undertakings for a period of three years from October 2005 to September 2008. In consideration for the right/licence granted, M/s Baba Trading Company was required to pay to MSRTC a sum of ₹ 3.25 crore, ₹ 3.35 crore ₹ 3.40 crore respectively for the years 2005-06, 2006-07 2007-08. The right so granted to the appellant, M/s Baba Trading Co. was sub-licensed to M/s ShriSai Transport and C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the demand of service tax under the category of franchisee service is not sustainable in law. A similar issue had arisen in the State of Gujarat also in respect of Gujarat State Road Transport Corporation, who had also sub-contracted the work to M/s ShriSai Marketing Trading Company, Jalgaon and the Board vide letter no. 137/123/2010-CX.4 dated 09/05/2011 clarified that the activities are not covered under business support services prior to 01/05/2011 and the activity would be leviable to service tax under business support services under the category of operational or administrative assistance of any kind with effect from 01/05/2011. 2.2 The learned Consultant also submits that the impugned demands are for the period prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the services rendered by the appellant to M/s ShriSai Transport and Courier Pvt. Ltd. comes within the category of franchise service and, therefore, the demands are sustainable. Accordingly, he pleads that the appellant should be put to terms. 4. We have carefully considered the submissions made by both the sides. 4.1 According to section 65(47) of the Finance Act, 1994, franchise means an agreement by which the franchisee is granted representational right to sell or manufacture goods or to provide service or undertake any process identified with franchisor, whether or not a trade mark, service mark, trade name or logo or any such symbol, as the case may be, is involved and the franchiser as per Section 65(48) means any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssifiable under business support service from a given date and the said service is not carved out of any of the existing services, it cannot be construed that service was taxable prior to that date. In the present case, therefore, the question of levying any service tax on the activity under the category of franchise service would not arise at all, inasmuch as the business support service has not been carved out of franchise service . In these circumstances, the appellant has made out a strong case for waiver of pre-deposit of the dues adjudged. Accordingly, we grant unconditional waiver from pre-deposit of dues adjudged against the appellant and stay recovery thereof during the pendency of the appeal. (Dictated in Court) - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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