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2016 (10) TMI 831 - CESTAT HYDERABAD

2016 (10) TMI 831 - CESTAT HYDERABAD - TMI - Royalty against grant of franchisee rights - revenue neutrality - CENVAT credit - procedural fault - Held that: - the appellant indeed have transferred 20% of their Franchisee/ Royalty fees along with service tax liability discharged thereon to M/s Aptech. This has also been certified by the Franchisor. This being so, while procedurally the appellant may have been at fault, it cannot may be alleged that the tax liability on the entire amount of fees r .....

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d. - Appeal No.ST/3205/2012 - ORDER NO-A/30780/2016 - Dated:- 8-9-2016 - Ms. Sulekha Beevi C.S., Member(Judicial) and Mr. Madhu Mohan Damodhar, Member(Technical) Shri B. Venogupal, Advocate for the Appellant Shri Guna Ranjan, AR for the Respondent Order per.: Sulekha Beevi, C.S. Brief facts as put forward by the appellant are as under: 1.1 The appellant was operating as a franchise to M/s Aptech and providing commercial coaching and training, under Aptech brand. For this purpose, out of the fee .....

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M/s Aptech on the appellant would also indicate the same. 1.2 In such circumstances, the appellant should have availed Cenvat credit of service tax paid by M/s Aptech, on the basis of the invoices issued by them and should have paid service tax on the student fee collected. For. Example: Student fee : Rs.10,000/- Service Tax payable by the appellant @ 10.3% : Rs.1,030/- Royalty paid to M/s Aptech : Rs.2,000/- Service Tax on royalty paid by M/s Aptech : Rs.206/- Cenvat credit that can be availed .....

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g 2005-06 to 2008-09 ie. the period of dispute in this case, as against the tax demand of ₹ 63,43,047/-. Had the appellant availed Cenvet credit of service tax paid by M/s Aptech and used it for paying service tax on the entire student fee collected, instead of deducting the royalty paid to M/s Aptech form the student fee, the situation is perfectly legal. The above method was followed by the appellant only due to ignorance of the procedures. In this sense, the appellant had not at ah} dis .....

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x returns is because of the fact that appellants have deducted amount of royalty @ 20% of fees which have been transferred to Aptech inclusive of service tax, however Aptech is paying service tax on the said amount. M/s Aptech have issued certificate dated 07.02.0012 declaring recurring Franchisee fees and service tax collections from appellant; wherein inter alia, they have confirmed that they have received recurring Franchisee fees along with service tax from appellant; that they have remitted .....

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