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2015 (12) TMI 492 - AT - Service TaxDemand of service tax - one-time franchise charges for transfer of technical know-how and for marketing of products - Held that:- On examining the terms and conditions of the agreement we have to agree that the arguments advanced by the Ld. counsel on behalf of the respondent is not without substance. The fourth limb of definition of franchise agreement as noted above is that the franchisee is put under an obligation not to engage in selling or providing similar goods or services or process, to any other person. The agreement entered on 01/04/2003 by the respondents with M/sMalkoh marketing (P) Ltd., does not stipulate any such condition imposing an obligation upon M/s Malkoh Marketing (P) Ltd. On such score, the agreement does not fit into the definition of franchise agreement as it stood during the relevant period. Since the agreement does not satisfy condition No. 4 of the definition of franchise agreement, the services provided in pursuance of the agreement also will not fall into the category of franchisee service. The demand has been rightly set aside by the Commissioner appeals and the impugned order calls for no interference. - Decided in favour of assessee.
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