9911796707
TMI Blog2008 (7) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... autonomy of a franchisee - impugned order finding FEN as rendering franchise service to be not sustainable X X X X Extracts X X X X X X X X Extracts X X X X ..... they operate in a prescribed manner and use stationery supplied by FEN. They should not undertake work for another courier agency. In a franchisor franchisee arrangement, the franchisee is independent and its activities are not regulated by the franchisor. The local couriers are authorized to represent FEN as an authorised agent in the agreement. There was no fee paid by the agents. The agents make a deposit with FEN called trade deposit. The agents pay service tax on the charges they collect from their clients, and return the balance after retaining their expenses and their remuneration. FEN does not impart any skill, technical know-how or managerial expertise to the agents. The work involved is like that of a post office. There is no serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he franchisees under courier service. Show-cause notice is dated 12-3-2007. The department was aware of the operations of FEN and its agents and the demand invoking larger period was not sustainable. 3. The learned SDR submits that the demand is on FEN and for a service other than courier agency. Courier agents pay tax on the taxable service they render and the impugned demand on FEN is for another activity subject to a different category of Service Tax. The demand is in order and deserves to be sustained. He cited the decision of the Tribunal in Jetking Information Ltd v. CCE [2007] 6 STT 444 (Mum. - CESTAT). The facts of that case were that the assessee therein had rendered service under the category of commercial coaching and training a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice mark, trade name or logo or any such symbol as the case may be, is involved." On a perusal of the agreement entered into between FEN and its agents it is seen that the local agents are not conferred representational right by FEN. As per the agreement the persons with whom agreement is entered into is entitled to use the name of FEN only as "authorized agent". The law provided up to 16-6-2005 that a franchise provided for payment of a fee by the franchisee to the franchisor. The agents in this case pay the courier charges upfront at a flat rate while collecting consignment notes from the appellant. The agents retain their share of the income as per the tariff. They also get incentive as prescribed based on turnover. They ..... X X X X Extracts X X X X X X X X Extracts X X X X
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