Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2023 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 364 - CESTAT BANGLOREClassification of service - Franchisee service or not - Joint Venture Agreement - sharing of profits - services provided by the appellant under written agreement dated 20.05.2006 with Institute of Hotel Management Studies - existence of relation of franchisor and franchisee or not - HELD THAT:- A cumulative reading of the stipulations/conditions under the said agreement does not lead to an inference that the arrangement between the appellant and the Institute is that of a Joint Venture. More or less similar circumstances were considered by this Tribunal in the case of The THE DELHI PUBLIC SCHOOL SOCIETY VERSUS CST, NEW DELHI [2013 (8) TMI 92 - CESTAT NEW DELHI]. In that case, while summarising the arrangement between The Delhi Public School Society and several schools in Delhi and elsewhere in India, the Tribunal had an occasion to examine and lay down the characteristics in identifying between Joint Venture agreement and that of a franchisee. After referring to the principles relating to interpretation of the agreements laid down by the House of Lords in series of cases, the Tribunal observed In the totality of circumstances neither the indicia of a partnership or a joint venture is discernable from the terms and conditions of the agreements between the parties, particularly since there is neither a contribution of assets nor a sharing of profits and / or losses provided in the agreements between the parties. These normative ingredients of a partnership or a joint venture are absent. Applying the principle laid down in the said judgment of the Tribunal, it is found that there is no arrangement of sharing of profits and losses between the parties nor there is contribution of assets by the appellant in implementing the project; entire burden of raising the infrastructure, maintenance, etc., rests with the Institute only. Also, there is no participation in preparing the syllabus but exclusively under the control of the appellant. The Trade name or logo of the appellant has been used and displayed for advertisement of the course, and it cannot be liberally used by the Institute - In the present case, the Institute is given right to use their logo etc., and advertise the said project to attract students to join the training programme and thereby representational right has been extended by the appellant to the Appellant. The demand is issued for normal period, on the basis of interpretation of the relevant provisions, in scrutinising the the claim of the assessee that that the arrangement with the institute is not a franchisee services, but joint venture agreement, hence imposition of penalty, in the facts of the present case under various provisions of Finance Act,1994 is not sustainable. Appeal allowed in part.
|