Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2011 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (4) TMI 242 - AT - Service TaxDemand - Franchise services - it can be seen that to consider an agreement as franchise agreement or the service rendered under the category of franchising service or not an assessee to satisfy all the four conditions which are enumerated herein above - Even the Board vide their Circular dt. 20/6/2003 had specifically indicated that all the ingredients mentioned from 1 to 4 need to be satisfied and then only such agreement can be considered as a franchise agreement - Held that: - . The purpose of the agreement of franchisees is to enable franchisee to carry on the business in the manner desired by the franchisor. The agreement also reveals that the appellant shall provide prospectus, course material, brochure, leaflets, direct mail materials, stationery etc. They shall also provide additional training to the staff franchisee request at additional cost. As such, it is seen that the agreements between the appellant and their franchisees satisfy all the four requisites of the definition of Franchise as provided under Section 65(47) of the Act, and the appellant is liable to pay service tax on the said services. - Appellant liable to pay service tax. Notification no. 9/03 ST dated 20-6-2003 - The services provided by the institute have to be viewed in the light of the definitions of such institute given in the notification. The same cannot be extended to franchise services given by the said institute to the franchisee. As such, we hold that the benefit of the said notification is also not to be available to the appellant. Regarding penalty - invoking the provisions Section 80 of the Finance Act, 1994, there being justifiable reason for non-payment of service tax, we are of the considered view that appellant need not be visited with any penalties. In view of this, the penalties imposed by the ld. Commissioner in the Order-in-Revision No.01/2007-Service Tax dt. 29/5/2007 is set aside.
|