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TMI Blog2009 (11) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act, 1994 (hereinafter referred for short, 'The Act'). 2. We have heard the counsel appearing for the appellant and Sri Abraham Thomas, Standing Counsel appearing for the respondent. 3. Admittedly, the appellant is engaged in rendering courier service which involves collection of letters, parcels, articles etc. from customers and then delivery of the same to the addressees. In this business, the appellant has engaged several agents who are named as Franchisees in the agreement between the appellant and them whereunder these agents collect articles from customers along with service charges at the tariff prescribed by the appellant. We are told that these agents called franchisees are also collecting service tax along with servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice payable for franchise service under section 65(47) read with section 65(105)(zze) of the Act. In effect, the service charges collected and shared between the appellant and the agents/franchisees got partly taxed twice for service tax under the Act, one under the head 'Tax on courier service' and other under the head 'Tax on franchise service'. Since the appeal filed against the Commissioner's order was rejected by the Tribunal, the appellant has approached this Court with these appeals filed under section 35G of the Central Excise Act, 1944. It is seen that while one appeal was decided by the Tribunal on merit, the other appeal was rejected by the Tribunal for nondeposit of the amount ordered to be paid as a condition for maintainabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 65(105)(zze) to the extent of the net amount received by the appellant. The Department has admitted the liability for the agents/franchisees for payment of service charges on the entire courier service charges recovered from customers and have therefore permitted them to register and remit the tax on regular basis. Therefore, the remaining question to be considered is whether net service charges recovered from customers for courier service retained by the appellant after payment of the portion due to the agents/franchisees is again assessable for service tax under the head 'Franchise service' under section 65(47) read with section 65(105)(zze) of the Act. In the first place we find from section 67 that taxable service is the gross amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not to engage in selling or providing similar goods or services or process, identified with any other person.'. From the above, it is clear that under franchise agreement, the franchisor gives a right to the franchisee to do business in a representative manner by using franchisor's trademark or trade name. In such case, the franchisee is to make payments to the franchisor for using their name, trademark etc., in respect of the goods sold or the service rendered. In this case, in fact, the agent/franchisee is not doing independent business but is only acting as agent for collection and delivery of parcel as agent in the courier service. Apart from appointing the agent/franchisees, the appellants are not rendering any service to the fra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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