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TMI Blog2012 (8) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... ,821/-, interest and 50% of penalties, within four weeks of receipt of the order and submit evidence thereof to the concerned Range Superintendent under intimation to his office, failing which the appeal shall be liable for rejection for non-compliance of provisions of Section 35F of the Central Excise Act, 1944 and on deposit of this amount only, the recovery of rest of the amount of penalties shall remain stayed till disposal of the appeal. 2. Adumbrated in brief, the facts of the case are that the petitioner is a Society established solely for educational purposes. It has been running international renowned schools namely Mayo College, Mayo College Girls School and Mayoor School in Ajmer. The object of the petitioner Society is to estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner was classified under Section 65(105)(zze) of the Finance Act, 1994. During the period from 14.12.2005 to 09.07.2010 the petitioner had received Rs. 1,09,23,500/- by providing franchise service. The petitioner was issued a show cause notice on 21.10.2010 proposing recovery of the service tax. The petitioner filed its written submission on 23.12.2011. The matter was adjudicated on 22.12.2011, wherein demand of service tax amounting to Rs. 12,13,821/- was confirmed along with interest. Penalties under Sections 76, 77(1)(a), 77(2) and 78 of the Finance Act, 1994 were also imposed. 3. Aggrieved with the order dated 22nd December, 2011, the petitioner-appellant filed an appeal before the respondent no.1 Commissioner, Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fell under the category of 'franchise service'. 5. The petitioner was given a personal hearing by the respondent no. 1 on 14th March, 2012 on stay application. Shri Ashok Sagar Advocate appeared and reiterated those very submissions before him, but the Commissioner, Central Excise (Appeals), Jaipur-II, found that the services provided by the petitioner to various institutions were prima facie covered under 'franchise service'. It also observed that the four institutions namely Mayoor Foundation, Jalandhar; Taparia Foundation, Bhopal; V.R. Educational Trust, New Delhi; Mayoor School, Noida; and K.C. Gurukul, Jammu & Kashmir, were permitted to use their name "Mayoor School", its logo and moto. These institutions were also re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh standard of the education in the said schools, as is in MCGC; to provide expertise and consultancy and know-how in educational material to set academic standards and other co-curricular activities in the school in such manner, as may be considered fit and proper and, as stipulated by the agreement. Neither the franchise fees was collected by the petitioner from these schools nor there is any whisper of the word franchise in the whole agreement and the petitioner does not fall in the net of service tax and thus, is not liable to pay service tax. Neither the adjudicating authority nor the respondent no. 1 Commissioner, Central Excise, took into consideration all these aspects and the adjudicating authority in undue haste, passed the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lacs in advance for the stipulated service by the petitioner for first three years, which was liable to be reviewed after every three years. A bare perusal of the language of Article 1, Article 2, Article 6 (e)(h), Article 7(e), Article 11(a)(b) and Article 14(b)(c)(d) tangibly suggests that an amount of Rs. 1,09,23,500/- was received by the petitioner from the aforesaid four schools, as a collaboration fees. The respondent no. 1 and the adjudicating authority found that this 'collaboration fees' was nothing but the 'franchise fees' and it clearly fell in the net of service tax. These four institutions were permitted to use their name 'Mayoor School', its logo as also its moto. These institutions were required to obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax is stayed, a great irreparable loss shall be caused to the Revenue. The Hon'ble Apex Court has deprecated the practice of granting stay in the recovery of tax, cess, fees etc. 11. In the case of United Bank of India v. Satyawati Tondon [2010] 8 SCC 110, the Hon'ble Apex Court has held thus: "46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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