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2020 (1) TMI 274 - AT - Service TaxFranchise Service - principal-agent relationship - relationship between the Appellant and the agents who are collecting money as against a bill of Bill issuer (public utility services) from the customers on behalf of Appellants, who is actually engaged in providing such Bill collection services to such customers - taxability of Franchisee fees - onetime fee/security deposit collected by the Appellant from the said agents. HELD THAT:- Perusal of the agreement shows that the agreement is titled as " Retail Agent Agreement" which has been executed by the Appellant with an intention to provide an efficient and easily assessable payment collection services for the bill issuers (as defined in the agreement itself) for the collection of the payments from the customers ( who are also defined in the agreement itself), who wish to settle their Bills from the Bill issuer over the country. All such persons who wish to become the part of the company's network of retail agents through which the company shall provide such payment collection services may be appointed as the agent of the company. This objective in itself is sufficient for us, when looked into in relation to the definition of franchise service and the meaning of representational right as discussed above, to hold that the agreement is to appoint someone who may undertake to collect the impugned bills payment not absolutely on his own but who undertake to collect the same on behalf of the Appellant. Mere use of word ‘principle to principle’ basis cannot be read for the impugned arrangement between appellant and his agents to be called as franchise service - Perusal of the terms of the agreement give us a clarity to hold that the payment of ₹ 15000/- is not at all the consideration towards the purchase of Representational Rights by the agent from the Appellant. Contrary thereto the arrangement herein is that payment to be made by the Appellant to the agent per Bill basis. This particular term of agreement is absolutely against the intent of what can be called as franchise service. The adjudicating authority below have committed an error while giving interpretation to the word 'franchise service'. The authorities have failed to observe the actual intent of the agreement involved - appeal allowed - decided in favor of appellant.
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