TMI Blog2013 (2) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... have provided the service to the people/State Government in respect of the bridge under the BOT agreement. They did provide this service for nearly 41/2 years also. For the rest of the period, this right was granted to the subsidiary-company with all the obligations and rights associated with it and that company has been rendering the same service, apparently, in exercise of representational right granted by the appellant. Prima facie, therefore, the arrangement between the appellant and the subsidiary-company would fit in the definition of ‘franchise” and, for that matter, the appellant and the subsidiary- company should be appropriately called franchisor and franchisee. - pre-deposit ordered for an amount of Rs. 3 crores - stay grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to collect toll from the users of the bridge for a period of 15 years. They did collect the toll for the first 41/2 years. In respect of the remaining period, the right to collect toll came to be assigned to the appellant s subsidiary as per the company s resolution dated 25-3-2006 ibid. These facts are not in dispute. The case of the appellant is that no franchise as defined under Section 65(47) of the Finance Act, 1994 was involved in the transaction between the appellant and its subsidiary inasmuch as no representational right to provide any taxable service to any other person was granted by the appellant to its subsidiary. It is submitted by the learned counsel for the appellant that the very levy of toll itself has been recog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be the grantee of the right granted by the appellant. It is submitted that, even in the absence of such an arrangement between the appellant and the subsidiary, the appellant ought to have operated the bridge by allowing it to be used by the vehicle owners and keeping the bridge in good repairs. It is argued that such activity being a service to the people and the State Government, the appellant has granted their subsidiary a franchise and, therefore, the amounts collected by them from the subsidiary should be subjected to service tax under the head franchise service . Apart from this, the findings of the adjudicating authority have also been reiterated. It is also submitted by the learned Special Consultant that the appellant did not di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same service, apparently, in exercise of representational right granted by the appellant. Prima facie, therefore, the arrangement between the appellant and the subsidiary-company would fit in the definition of franchise and, for that matter, the appellant and the subsidiary- company should be appropriately called franchisor and franchisee. In this view of the matter, prima facie service tax is leviable on the amount of Rs. 125 crores under the aforesaid head. We have also considered the plea of limitation. It is not the case of the appellant that they disclosed the facts related to franchise to the Department of filed statutory returns or paid service tax. The facts came to the knowledge of the Department only at the stage of investig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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