9911796707
TMI Blog2015 (8) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... redit Rules, 2004 is also confirmed; equivalent penalty under Section 78 of the Finance Act, 1994 has also been confirmed apart from interest leviable under Section 75. Appellant (referred as C-DAC) are in appeal against this order. 2. The appellant is a scientific society recognised as a Scientific and Industrial Research Organisation by Ministry of Science and Technology, and by Ministry of Communications and information technology. Its Governing Council is chaired by the Minister of State of Science & Technology and has other senior officials on its Board. Under the Memorandum of Association, the society is mandated to undertake design and development of advance computing systems as also to build up high quality research and development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service. Another issue raised in the show-cause notice is that the appellant utilised Cenvat credit of service tax amount to Rs. 2,79,463/- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20.06.2003 as amended by Notification 1/04 dated 04.02.2004 and Notification 24/04 dated 10.09.2004. The ld. counsel makes a strong argument that the payment of 25% of course fees which is received by the appellant is not in relation to the franchise service but is received from the students for imparting training. Appellant relies on the CESTAT judgement in the case of Doon Institute of Information Technology Pvt. Ltd. vs. CCE 2008 (12) STR 459. The ld. counsel also states that if their appeal is not accepted on merits, the benefit of deduction of value of course material from the total value should be given in terms of Notification 12/03-ST. He also challenged the computation of service tax liability and said it should be on basis of cum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder 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 of the franchise fees. We agree with the ld. counsel that as the course fees are paid by the students for the training and the fees is shared in the ratio of 25% : 75% between the appellant and various training centre, therefore, it cannot be said that the share of 25% received by the appellant is received towards the franchise servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Even clause (iii) of the definition of franchise is not met because the fees is not paid by the training centre to the appellant. Rather the fees collected from the 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. 5.2. The argument of the revenue as held in the adjudication proceedings is that the words "in relation to" used in the definition of franchise service signify that any activity in connection 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 servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised in this period. The return shows the remark 'under amnesty scheme'. We do not understand the significance of Commissioner's findings that the balance as on 30.09.2004 was nil. It is obvious that if the credit is utilised for the preceding period they will be a nil balance. No objection appears to have been raised at the time of submission of the returns or on their scrutiny thereafter. The return also shows that it was received by one Shri Patil. In view of the factual circumstances, we find no reason to deny the benefit of Cenvat credit and therefore, we set aside the demand on this count. 7. Having decided the issue on merits, we do not find it necessary to go into the other aspects such as time limitation. However, we do no ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
