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2013 (2) TMI 610 - AT - Service TaxFranchise service - right to collect toll in respect of Yenam-Yedurulanka in Bridge - bridge was constructed by the appellant under a ‘Build-Operate-Transfer’ (BOT) Agreement - assignment of the work to the subsidiary - held that:- On a perusal of the definition of “franchise” given under Section 65(47) under the Finance Act, 1994, we note that it refers to an agreement by which the franchisee is granted representational right to provide service identified with the franchisor whether or not any ‘service mark’ is involved. Prima facie, in the absence of such an agreement, the appellant themselves would have provided the service to the people/State Government in respect of the bridge under the BOT agreement. They did provide this service for nearly 41/2 years also. For the rest of the period, this right was granted to the subsidiary-company with all the obligations and rights associated with it and that company has been rendering the same service, apparently, in exercise of representational right granted by the appellant. Prima facie, therefore, the arrangement between the appellant and the subsidiary-company would fit in the definition of ‘franchise” and, for that matter, the appellant and the subsidiary- company should be appropriately called franchisor and franchisee. - pre-deposit ordered for an amount of Rs. 3 crores - stay granted partly.
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