TMI Blog2013 (8) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... to the appellant has been put on the packages manufactured/marketed by the sub-licensees. A laptop containing a label of ‘windows', only denotes that the processor or the operating system/software, as the case may be in the said laptop and by putting such label, the laptop manufacturing company does not represent ‘Microsoft' or become the franchisee of ‘Microsoft'. - in a franchisee transaction the franchisee loses his individual identity and represent the identity of franchisor to the outside world, as in the case of ‘McDonald' the customers are not concerned with who owns the ‘McDonald's restaurant (franchisee) - The customers identify it with ‘McDonald (the franchisor). The appellants had imported the Technology which is owned by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the terms and conditions of the license between all seven sub-licensees are same, and based on various statements recorded under Section 14 of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 the Department issued Show Cause Notices alleging that the activities undertaken by them of giving franchise rights to sub-licensees is covered under franchise services'. There was a proposal for penalty also. On adjudication, the learned Commissioner confirmed the demand and imposed various penalties. 2.3 The appellant filed this appeal and application for stay against the Order-in-Original No. 02-03/Commr/2010 dated 29.1.2010 whereby the learned Commissioner confirmed the demand alongwith interest and imposed various pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ark of the appellant. It only indicates the technology contained in the seeds under sale. 3.5 The contention is that the said product-package label clearly indicates that the seeds are manufactured and marketed in by the sub-licensees in their own name. There is no representation on the package either of the Appellant or the Licensor (owner of the technology). The label on the package show beyond reasonable doubt the sub-licensees do not claim to represent anybody but effect the production, sale, and marketing on their own name. 3.6 The contention is that the said style of the presentation of the product-package label is synonymous with the practice being followed by other manufacturers. For example, a laptop containing a label of Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction as franchise is granting representational right by the franchisor to franchisee which is absent in the present case. 3.10 As regards valuation, the contention is that the learned Commissioner has attributed the value to the transaction with Nath Seeds Ltd based on comparable transaction. The contention is that there is no such authority under the Finance Act, 1994 to use the comparable transaction value when the transaction is without any consideration. 3.11 On limitation the contention is that the Show Cause Notice is issued on8.4.2009, therefore demand from April 2004 to September 2007 is beyond the normal period of limitation, especially when the Revenue itself gave an impression to the appellant that their services are liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to appreciate the matter in its proper perspective the relevant provisions of law before and after the amendment are reproduced hereunder for convenience of reference: Before 16.6.2005 Section 65 (47) franchise means an agreement by which- (i) franchisee is granted representational right to sell or manufacture goods or to provide service or undertake any process identified with franchisor, whether or not a trade mark, service mark, trade name or logo or any such symbol, as the case may be, is involved; (ii) the franchisor provides concepts of business operation to franchisee, including know-how, method of operation, managerial expertise, marketing technique or training and standards of quality control except passin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther multiply for onward sale by them to the farmers for the purpose of growing commercial crop. The appellants are not granted any representational right' from BTC to represent them in India, nor entitled to grant or they have actually granted any representational right to the sub-licensees. 5.4 The Revenue's case rests on the premise that the logo or hallmark belonging to the appellant is put on the seed package manufactured/marketed by the sub-licensees. The appellants produced a few samples of the product package labels for us. On perusal of the samples, we agree with the appellant that the packages contain mark Fusion BT which only denotes that the seeds being sold contain Fusion BT genes, and it does not denote that the said ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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