TMI Blog2009 (11) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... T) REPRESENTED BY : Shri Joseph Mathew, C.A. , for the Appellant. Shri U. Raja Ram, JDR, for the Respondent. [Order per : P. Karthikeyan, Member (T)]. - M/s. Bonanza Speed Couriers (P) Ltd. are engaged in providing 'Courier Service' and have appointed franchisees at various places in Kerala and a few places outside Kerala. Though the assessee had entered into franchise agreement with several persons, it did not discharge liability to service tax under the category 'franchise service' classifiable under Section 65 clause (47) of the Finance Act, 1994 (the Act) during the period July 2003 to March 2005. After due process of law the original authority demanded service tax of Rs. 2,37,847/- (Rupe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod beyond the normal period. There was no deliberate attempt to evade payment of duty found against the appellants and therefore, extended period could not be validly invoked. They relied on the judgment of the Apex Court in Pushpam Pharmaceuticals Company v. Collector of Central Excise, Bombay reported at [1995 (78) E.L.T. 401 (S.C.)] in support of the claim. The show cause notice had not alleged fraud or suppression or other grounds to justify invocation of extended period. They cited the definition of 'franchisee' appearing in 65(47) of the Act and argued that the appellants had not appointed franchisees within the meaning of the above clause. The assessee reimbursed only the actual expenditure incurred by its agents. In the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcept passing on the ownership of all know-how to franchisee; (vii) The franchisee is required to pay to the franchiser, directly or indirectly, a fee; and (viii) the franchisee is under an obligation not to engage in selling or providing similar goods or services or process, identified with any other person. 5.1 It was submitted that the agreement with the agents was not implemented/enforced particularly as regards the provisions relating to payment of franchisee fees to the franchiser and the prohibition that the franchisee was not engaged in providing similar services identified with any other person. We find that the Commissioner (Appeals) has not given a categorical finding in the impugned order that the appellants receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d any fees to M/s. Franch Express Network Pvt. Ltd. It was held that the M/s. Franch Express Network Pvt. Ltd. had undertaken 'Courier Service' engaging several agents and did not operate as per the arrangement. It was held that the agents were not franchisees and M/s. FEL franchiser in a franchisee. The persons whom the Commissioner found to be franchisees were only agents of M/s. FEL carrying out part of the operations of M/s. FEL which constituted 'Courier Agency Service.' 5.3 In the Dewsoft Overseas Pvt. Ltd. case, the appellants therein were held to be not a franchiser as the Revenue had not proved that the agreement between the appellant and its client was a franchise agreement within the meaning of the term defined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service of other franchisors and in view of this, conclusion in this regard has to be drawn against the appellants. We do not agree with this plea of the Revenue. During the period of dispute, as per the definition of the word franchise as given in Section 65(47) the franchise agreement, which attracted service tax was to satisfy four conditions, and if the Revenue wants to subject a person to service tax under this entry, the burden of proving that the agreement between that person and his client is a franchise agreement within the meaning of this term, as defined under Section 65(47) of the Finance Act, 1994, would be on the Revenue. If the Appellants were not coming forward with the information with regard to condition No. '4' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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