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2020 (2) TMI 227 - AT - Service TaxBusiness Auxiliary Services - appellant-cable T.V. operator, entered into an agreement with M/s Sify Limited, Chennai to provide internet services of M/s Sify Limited through their cable network to their clients - levy of service tax - HELD THAT:- A perusal of various clauses of the agreement would show that the agreement is not in the nature of an agreement between a principal and principal. It is in a nature of an agreement between a principal and an agent. As a principal, M/s Sify Limited is entitled to engage as many several agents as they please in addition to the appellant (para 3.5 of the agreement). On the other hand, as an agent the appellant cannot provide services of other internet service providers through their network (para 3.7 of the agreement). The agreement is for an initial term of 3 years and renewable at Sify’s option for further term of one year each. Either during the initial term or during any renewed term, Sify may, at any time, terminate the agreement without assigning any reason whatsoever after giving 90 days notice. Similar option of termination is not available to the appellant. The appellant collects the revenue on behalf of M/s Sify Limited from the customers and for the services rendered by the appellant, M/s Sify Limited will pay to the appellant 30% of the browsing revenue. There is nothing in the entire agreement that would suggest that a new joint venture has been formed or a joint venture between the two companies has been established as a business. Nothing in the agreement suggests that the appellant and Sify have an agreement on Principal to Principal basis - in the present case based on the nature of the agreement the appellant is providing services to M/s Sify Limited which fall under the category of business auxiliary service. Appeal dismissed - decided against appellant.
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