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TMI Blog2015 (8) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... he students comes into the account of the appellant who then pay 75% of theshare to the training centre. In this view of the matter, the activity clearly falls outside the scope of the franchise service. No justification for invoking the extended time period as the appellant are an advanced research and development centre under the Ministry of Science and technology and will not indulge in any mis-statement or suppression with an intention to evade duty. - Decision on the cases of assessee's own previous case [2008 (10) TMI 148 - CESTAT BANGLORE] and [2002 (2) TMI 105 - SUPREME COURT OF INDIA] followed - Decided in favour of assessee. - Appeal No. ST/625/10-Mum - Final Order No. A/2212/2015-WZB/STB - Dated:- 23-6-2015 - M V Ravindran, Member (J) And P S Pruthi, Member (T),JJ. For the Appellant : Shri Ashish Philip, Adv. For the Respondent : Shri R K Das, DC (AR) ORDER Per: P S Pruthi: Under the impugned order passed by the Commissioner (Appeals), service tax demand of ₹ 32,14,844 is upheld for the period 01.07.2003 to 30.09.2004 under the category of franchise service. Service tax credit amounting to ₹ 2,79,463/- demanded under Rule 14 of CE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/- without having balance in their credit account of 30.09.2004 and thereby contravened Rule 14 of CENVAT Credit Rules, 2004. 3. The ld. counsel emphasised that in the sharing of course fees between the appellant and the authorised training centre there is no service provider and service receiver relationship and therefore no service tax is payable. The appellant relied on Board circular no. 109/03/2009 dated 23.02.2009 in which it is clarified that revenue sharing activities are not taxable. The counsel shows the definition of franchise under Section 65(47) of the Finance Act, 1994 as it existed prior to 16.06.2005 which defines franchise' as under:- Franchise Service means service provided to a franchisee, by the franchisor in relation to franchise; 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 indentified 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 method of op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndicated that they are in relation to the franchise service because the entire training program is conducted with the approval of the appellant. The Agreement provides that the authorisation training centre cannot used C-DAC name, trade mark, trade name or any other intellectual property, training material without the prior written consent of the appellant. 5. We have considered the submissions of both sides. We find that the Authorisation Agreement, under Para 10 Schedule of Fees provides for Authorisation fee and course fees separately and distinctly. Only because all the fees are provided in one Agreement does not necessarily lead to a conclusion that the different components of fees are only for the purpose of grant of franchise. Their very names suggest differently. Under Para 10B, the Authorisation fees is for grant of authorisation for conduct of training at the sites of authorisation training centres as approved under the Agreement. The authorisation fee is paid at the time of signing of the Authorisation Agreement. On these fees the appellant have paid service tax under the category of franchise service. We do not understand how the course fees can be said to be a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the franchise service will also be considered as part of the franchise service. Since the course fees is part of the franchise activity, it should be included in the value of the service for purpose of service tax. In our view the words in relation to have to be read in the context in which they are used. Thus words are in the context of franchise service. But the issue before us is the course fees or training fees. The service tax law nowhere states that if two distinct activities are undertaken or provided in a single agreement, they should be taxed under the same service category. The activity of coaching for which course fees is received is not even remotely connected to the franchise granted by the appellant in the form of Authorisation. In our view, the provisions of law have not been appreciated properly by the Revenue. 6. Another issue in the proceedings is the denial of the Cenvat credit said to be wrongly utilised. The adjudication order is far from clear on this issue. It only states that the appellant utilised the credit without having Cenvat balance in their account on 30.09.2004. It also states that the noticee failed to produce the relevant invoices as proo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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