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2015 (12) TMI 492 - CESTAT NEW DELHI

2015 (12) TMI 492 - CESTAT NEW DELHI - 2016 (42) S.T.R. 781 (Tri. - Del.) - Demand of service tax - one-time franchise charges for transfer of technical know-how and for marketing of products - Held that:- On examining the terms and conditions of the agreement we have to agree that the arguments advanced by the Ld. counsel on behalf of the respondent is not without substance. The fourth limb of definition of franchise agreement as noted above is that the franchisee is put under an obligation not .....

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the services provided in pursuance of the agreement also will not fall into the category of franchisee service. The demand has been rightly set aside by the Commissioner appeals and the impugned order calls for no interference. - Decided in favour of assessee. - Appeal No.ST/873/09-CUS (DB) - FINAL ORDER NO.53684/2015 - Dated:- 19-11-2015 - Mr.R.K.Singh, Member (Technical) And Ms.Sulekha Beevi C.S., Member (Judicial) For the Petitioner : Shri M.R. Sharma, AR For the Respondent : Ms. Priyanka Goe .....

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franchise services became taxable w.e.f. 01/07/2003 and the Department entertained the view that the one-time consideration received by the respondents for the services to be rendered is subject to levy of service tax. Accordingly, a show cause notice dated 14.2.2007 was issued to the respondents. After adjudication, the order passed by the original authority confirmed the demand of service tax along with interest and also imposed equal amount of penalty. The respondents filed appeal before the .....

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s are liable to pay service tax as franchise services became taxable with effect from 01/07/2003. The explanation added to Section 67 of the Finance Act, 1994, makes it clear that the gross amount charged for the taxable service shall include any amount received for the service before, during or after providing such service. Therefore though respondents had entered into the agreement and received consideration prior to 01/07/2003, as the services are rendered subsequently, the amount received is .....

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nt period which is reproduced as under: " taxable service means any service provided or to be provided to a franchisee, by the franchisor in relation to franchise". (Section 65(105 )( zee) "Franchise means an agreement by which - 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 i .....

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