TMI Blog2018 (8) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... y for entering in the database maintained by the registry. It becomes abundantly clear that both registry and registrars are independent entities operating on principle-to-principle basis - the original Adjudicating Authority has miserably erred while holding an arrangement of accreditation as that of providing franchisee services - demand set aside. Extended period of limitation - penalty - Held that:- No services as alleged by the Department have been rendered by the appellant. Show Cause Notice in fact was wrongly served - there seems no ground available with the Department to invoke the extended period of limitation while serving the said Show Cause Notice - penalty also set aside on this ground. Appeal allowed - decided in favor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of intelligence gathered alleged that the appellants while appointing registrars to register the domain names were collecting charges per domain name registered by the said accredited registrar per year as registration charges, transfer charges, renewal charges, etc. in lieu of services rendered to these registrars. The said services are alleged to be the franchise services taxable w.e.f. 16.06.2005. Resultantly, the Show Cause Notice dated 14.10.2010 was served upon the appellants. The demand as raised in the Show Cause Notice has been confirmed vide the impugned order under challenge. Hence, the present Appeal. 3. We have heard Shri B.L. Narasimhan and Ms. Shagun Arora, Ld. Advocates for the appellants and Shri Amresh Jain, Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Airport Pvt. Ltd. Vs. Union of India Ors, 2017 TIOL 394 HC DEL ST 5. While rebutting these arguments, Ld. DR has justified the impugned order. It is impressed upon that from the documents provided by the appellant under the stage of investigation the original Adjudicating Authority has rightly concluded that the appellant are raising monthly invoices on their accredited registrars with all the billing descriptions. In view thereof, merely mentioning their registrar to be the accredited registrar will not take them out of the ambit of the term franchise. Thus, the value received is for rendering the taxable service as defined under Section 65(47) of Finance Act, 1994 and as is taxable under Section 65(105) (zze) of the Act. The find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice 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 65 (48) franchisor means any person who enters into franchise with a franchisee and includes any associates of franchisor or a person designated by franchisor to enter into franchise on his behalf the term franchisee shall be construed accordingly. Franchise Services are made taxable under Section 65 (105) (zze) of the Finance Act. From these definitions it is clear that two components are important for an arrangement of franchise: (a) The grant of representational right (b) Identification with the franchisor Representational right permits the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .in‟ registry‟s name or website is licensed vide this agreement. The registrar is prohibited from assigning or sublicensing his services. The agreement also includes the supervisory authority of .in‟ registry upon its registrars empowering them to even take the penal actions against registrars who otherwise are prohibited from selling WHOIS check (name available look out) data. Not only this, Clause 9.16 of the agreement permits each party to independently own its intellectual property including all patents, trademarks, trade names, service marks, trade secrets, property process and all other forms of intellectual property. Both the parties into this agreement recognised that they shall have no right, title or interest or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement between ICANN and the appellant we are not able to find out any service or a process for which ICANN is associated and is being provided by the appellant. Appellants provided registrar service as per the powers under Article II of powers for ICANN, ICANN is prohibited from acting as registrar. From the agreements or from the bylaws, we are not able to find any process that has been developed by the ICANN and being used by the appellants. We find what is being done by the ICANN is to set minimum standards for the performance of registration function and recognize that the appellants are meeting those standards. Revenue has not been able to pinpoint to us either any service or any process for which ICANN is known and that process is b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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