Tax Management India. Com TMI - Tax Management India. Com
Case Laws Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Manuals News SMS Articles Highlights
        Home        
Extracts
Home List
← Previous Next →

M/s. Podar Jumbo Kids Versus Commissioner of Service Tax, Mumbai-I

2017 (9) TMI 1561 - CESTAT MUMBAI

Franchisee Service - Levy of service tax - Revenue has issued a show cause notice it was culminated into adjudication order wherein it was held that the arrangement between the appellant and educational institute is of franchise agreement accordingly the franchise fee is liable for service tax - interpretation of statute - Penalty - Held that: - as per the agreement, the appellant is providing the technical school of education as well as their brand name Podar Jumbo Kids to the franchisee agains .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1-8-2017 - Shri Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri R. S. Samria, C.A. for appellant Shri B.Kumar Iyer, Supdt. (A.R) for respondent ORDER Per : Ramesh Nair The fact of the case is that the appellant are engaged in providing franchise service which is taxable w.e.f. 1.7.2003. They were not registered with the service tax authorities and they have not paid the service for the period 1.7.2003 to 30.6.2005. The appellant M/s. Podar Jumbo Kids is a body constitute by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ranchise fee is liable for service tax. Being aggrieved by the order-in-original the appellant filed appeal before the Commissioner (Appeals), who also concurring with the views of the adjudicating authority upheld the order-in-original and rejected the appeal therefore the appellant are before us. 2. Shri R.S. Samria, Ld. Chartered Accountant appearing on behalf of the appellant submits that the demand was confirmed under the franchise service. As per the definition of Franchise service as prov .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ef Commissioner of Income-Tax Vs. St. Peter's Educational Society [2016] 385 ITR 66 (SC) (ii) Delhi Public School Society Vs. Commr. of Service Tax, New Delhi - 2013 (32) STR 179 (Tri.-Del.) 3. Shri B. Kumar Iyer, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that both the lower authorities have given a detailed finding explaining that the service of the appellant it clearly covered under the franchise service a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ellant is collecting the franchise fee. The definition of Franchise reads as under: (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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al right to the franchise to provide service in relation to education under the trademark of the appellant therefore the clause (i) is clearly exist. As per sub-clause (ii) the franchisor provides the concepts of business operation with the franchisee, including know-how method of operation etc. In the facts of the present case the appellant have indeed provided the know-how and method of teaching technique to the franchise. However the ownership of know-how under the brand name of Podar Jumbo K .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt in clause (h) of an obligation to be undertaken by the franchisee shall not be entitled to allow any sub-franchisee entered into any arrangements whatsoever with any other person or party for conduct of Podar Jumbo Kids with a view to sub franchising or sub delegating the rights and duties granted to the franchisee under this agreement. As per this clause of the agreement the sub-clause (iv) of the definition of franchisee also stands fulfilled. Therefore in our considered view the service is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

regard judgement in the Delhi Public School Society (supra) the Tribunal in the order in Para 19 of the order on the issue of Franchise concluded as under: 19. Issue 'B' : This issue requires determination as to whether during the period 1-7-2003 to 15-6-2003 [prior to amendment of the definition of franchise in Section 65(47)], the services provided by the petitioner satisfy the ingredients of franchise as defined. As earlier adverted to, franchise is defined during the period (1-7-200 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he franchisor, directly or indirectly; and (d) The franchisee being under an obligation not to engage in providing similar services or process, identified with any other person. On 20-6-2003, Board Circular No.59/8/2003-S.T. was issued to clarify the contours of new taxable services introduced pursuant to the Finance Act, 2003, including "franchise service", brought into force w.e.f. 1-7-2003. This circular states that franchise service as defined in Section 65(47) of the Act sets out .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

A we have concluded against the assessee that the enterprise pursuant to the agreements is not a Joint Venture in the true sense of the term and that the services provided by the assessee to the other party would not constitute services to itself but would clearly constitute services to another. The terms of the agreement clearly reveal that the other party to the agreements is granted a representational right to provide services by way of imparting of education through the school to be establi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot to engage in providing services or processes, identified with any other person. This ingredient indicates that the other party to the agreements should be obligated not to establish or administer an English Medium School identified with any other person. In clause 8(h) [of the representative agreement considered for analysis], we have noticed that rights in the name/motto/logo are stipulated to be the absolute property of the assessee and the use of these is prohibited to the other party for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Let's just recapitulate:

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.