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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 ..... of the grant of said license - this 'collaboration fees' was nothing but the 'franchise fees' and it clearly fell in the net of service tax - writ petition dismissed - D.B. Civil Writ Petition No. 6354 of 2012 - - - Dated:- 1-5-2012 - Arun Mishra, Mahesh Bhagwati, JJ. A.K. Bhandari and Vaibhav Bhargava for the Petitioner. Ajay Shukla for the Respondent. ORDER Mahesh Bhagwati, J. Challenge in this writ petition is to the order dated 28th March, 2012, whereby the Commissioner, Central Excise (Appeals), Jaipur-II, disposed of the stay application of the petitioner directing him to deposit the entire amount of service tax ₹ 12,13,821/-, interest and 50% of penalties, within four weeks of receipt of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different parts of India, namely Mayoor Foundation, Jalandhar; Taparia Foundation, Bhopal; V.R. Educational Trust, New Delhi; Mayoor School, Noida; and K.C. Gurukul, Jammu Kashmir. It is stated that intelligence collected by the Anti Evasion Wing of Central Excise Division, Ajmer, revealed that the petitioner was engaged in providing 'franchise service' to various parties/schools, who were running their institutes using its school name Mayoor School . On scrutiny of record submitted by the petitioner, it came to notice that they had received franchise fee/collaboration fee in their books of account from various parties/schools. The service provided by the petitioner was classified under Section 65(105)(zze) of the Finance Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement'. A reading of the agreement in their entirety makes it abundantly clear that agreements do not constitute a franchise agreement. They did not give any representational right to four schools/institutions to provide services nor received any franchise fees. It received amounts towards its collaborative efforts in assisting them to set up and run the schools. The petitioner also submitted before the respondent no.1 that their case was fit for dispensing with pre-deposit of service tax, penalties and interest. Balance of convenience was also in their favour, yet the adjudicating authority, on the other hand, observed that the service provided by the petitioner-appellant fell under the category of 'franchise service'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the parties and carefully perused the relevant material on record including the impugned order. 7. Learned counsel for the petitioner has reiterated all those grounds as enumerated in the writ petition and canvassed that the petitioner did not provide any franchise service to any of the aforesaid four institutions, rather they provided their expertise for the establishment and development of these schools. A bare perusal of the agreement does not reveal that any franchise service was provided by the petitioner to these schools. Learned counsel took us through the various articles of the agreement and canvassed that the main obligation of the petitioner was to maintain the high standard of the education in the said sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustify any intervention. 9. Having reflected over the submissions made at the bar and carefully scanned the relevant material on record including the agreement entered into between the petitioner and other four schools, it is revealed that the petitioner not only permitted, allowed and granted a revokable license to these schools to use the name 'Mayoor School', its logo and moto, but in consideration of the grant of said license, the petitioner MCGC realized an initial one time non-refundable payment of ₹ 25 lacs from the said four schools at the time of execution of this agreement for the services and obligations of MCGC. Not only this, the petitioner also realized annual fees of ₹ 10 lacs in advance for the stipu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng arrived at by the Commissioner, Central Excise to this effect that the petitioner is a registered society and it provided the franchise service to aforesaid four schools, who were permitted to use their name 'Mayoor School', logo and moto. Learned counsel for the petitioner has failed to convince us to take a view contrary to that of the view taken by the adjudicating authority and the Commissioner, Central Excise (Appeals), Jaipur-II. We do not find any ground to interfere with the impugned order and thus, the writ petition being devoid of any substance deserves to be dismissed. 10. Further the balance of convenience is also not found to be in favour of the petitioner and in case the recovery of said service tax is stayed, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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