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TMI Blog2023 (11) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... property, the transaction under the agreement involves right to sell or manufacture the goods are undertake a process identified with franchisor. HELD THAT:- The agreement itself is settled agreement for transfer of business on franchise basis. We find on going through the various clauses of the agreement are in the nature of Franchise Agreement. The agreement includes conditions for following the concept of business operation, manufacture or technical specifications, marketing etc. in addition to the restriction on selling, producing or providing similar goods or services identified with any other person. The appellants argue that the condition put forth under Clause 7(j) is not absolute as envisaged under condition No.(iv) and it is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R (TECHNICAL) Shri R.K. Hasija and Shri Shivang Puri, Advocates for the Appellant Shri Nikhil Kumar Singh and Ms. Shivani, Authorised Representatives for the Respondent ORDER M/s Liberty Group Marketing Division (ST/373/2012) and Liberty Enterprises (ST/374/2012), the appellants, are engaged in the manufacturing and distribution of footwear and have entered into separate agreements dated 31.03.2003 with M/s Liberty Shoes Ltd. for transfer of their business of the respective manufacturing units; accordingly, they have received payments from M/s Liberty Shoes Ltd. and have paid service under the category of Intellectual Property Service up to 15.06.2005. For the period after 15.06.2005, they started paying service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r an obligation not to engage in selling or providing similar goods or services or process, identified with any other person. 3. Learned Counsel submits that as per the definition above, all the four conditions have to satisfied; however, in their case, condition no. (iv) is not satisfied. After the amendment in the definition of Franchise w.e.f. 16.05.2005, they have been discharging duty under Franchise Service. He submits that Circular No.59/08/2003 dated 20.06.2003 issued by CBEC clarified that unless all the ingredients are satisfied, the agreement cannot be said to be a Franchise Agreement. The appellants agreement did not satisfy the condition no. (iv) that the franchisee is under an obligation not to engage in selling or provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself and have been submitting ST- 3 Forms after paying service tax under the Head Intellectual Property Service . He further submits that the issue is revenue neutral as M/s Liberty Shoes Ltd. would have been eligible for the service tax paid by the appellants under any Head. He relies on the following: Standard Grease Specialities Pvt. Ltd. 2014 (303) ELT 434 (Tri.) Commissioner Vs Tarapur Grease India Pvt. Ltd.- 2016 (334) ELT 416 (Bom.) Standard Drum Barrel Mfg. Co. 2017 ( ) TMI 392- CESTAT Mumbai Sanvijay Rolling Engineering Ltd. 2018 (11) GSTL 344 (Bom.) 5. Shri Nikhil Kumar Singh, assisted by Ms. Shivani, learned Authorized Representatives for the Department, reiterates the findings of the OIO and O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) is also satisfied in view of the Clause 7 (j) which reads as under: 7 (j)No other Business Not without prior written approval of the LE to permit any other business venture to operate or trade at the Premises nor without such approval to extend the scope or range of the Business at the Premises and if the LE approves any such sharing or extension to procure that the gross sales of the same shall be subject to this Agreement and to pay the Continuing Fees. 8. We find that the agreement itself is settled agreement for transfer of business on franchise basis. We find on going through the various clauses of the agreement are in the nature of Franchise Agreement. The agreement includes conditions for following the concept of busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d necessarily qualify all the three possibilities i.e., (i).to sell or manufacture goods, (ii) to provide service, and (iii) undertake any process identified with the franchisor. 58. A representational right would mean that a right is available with the franchisee to represent the franchisor. When the Franchisee represents the franchisor, for all practical purposes, the franchisee loses its individual identity and would be known by the identity of the franchisor. The individual identity of the franchisee is subsumed in the identity of the franchisor. In the case of a franchise, anyone dealing with the franchisee would get an impression as if he were dealing with the franchisor . We feel that above decisions squarely covers the situati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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