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2015 (10) TMI 2412 - AT - Service TaxFranchise Service – appellant, it is alleged, granted franchise for manufacture of firebricks of specifications, design and quality prescribed by it to some other small manufacturing units located at Katni. - Whether service rendered by appellant to manufacturers fell under scope of franchise service? - Appellant contends that it is not a franchise agreement and there was no franchise fee and goods manufactured were property of appellant and so called franchisees had no right over them - Sales tax was paid on entire value and thus service tax could not be levied on the same. Held That:- It comes out loud and clear from agreement that manufacturers did not have any representational right to manufacture goods identified with appellant - Appellant did not provide any service to manufacturers nor did manufacturers make any payment to appellant for any service - Merely because words 'franchise' and 'franchisee' have been used in agreement does not ipso facto mean that as per that agreement franchise service was rendered and thus agreement miserably fails to qualify as franchise agreement - Goods were sold to appellant and were consigned only to those persons whom he directed manufacturer to consign them to – Actual transactions between appellant and manufacturer are also in conformity with agreement – Impugned demand not sustainable – Decided in favour of assessee.
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