TaxTMI 
TaxTMI 
2014 (7) TMI 1044
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.... the memorandum of appeal. After hearing both sides, we have found good reasons to allow this application and it is ordered accordingly. 2. The stay application filed by the appellant seeks waiver of pre-deposit and stay of recovery in respect of the adjudged dues which include Rs. 59,89,064/- demanded towards service tax and education cess under the Head "Franchise Service" for the period from April 2004 to March 2009. 3. On a perusal of the records, we find that the appellant had entered into franchise agreement dated 4-11-2010 with one Mr. M.P. Savan Kumar, which inter alia provided that the appellant as a franchisor would grant the franchise of "G-TEC COMPUTER EDUCATION" to the said Shri Savan Kumar (franchisee) and that....
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....sel for the appellant submits that they paid service tax on the registration fee and they were not liable to pay service tax on the amounts collected by them as royalty from the franchisee. It is argued that such royalty did not have anything to do with the "Franchise Service" and hence did not represent taxable value of the service. It is further submitted that the appellant is claiming support from a few decisions such as Speed & Safe Courier Service v. Commissioner [2010 (18) S.T.R. 550 (Ker.)] and Franch Express Network (P) Ltd. v. Commissioner of Service Tax, Chennai [2008 (12) S.T.R. 370 (Tri.-Che)]. The learned counsel has also pleaded limitation against the demand of service tax. The show-cause notice was issued on 18-9-2009. The re....
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....t is submitted that the only consideration referred to in the agreement between the franchisor and the franchisee is the so-called royalty and hence it should squarely be adopted as part of the taxable value of "Franchise Service". It is submitted that the factum of collection of such consideration by the franchisor from the franchisee for 'Franchise Service' was not disclosed to the department by the appellant (franchisor). No copy of the agreement was supplied by the appellant at any stage. It was only on 2-7-2009 that the appellant furnished the details of collection of royalty to the department. The amounts were not disclosed in the returns filed by the appellant. In this circumstance, according to the learned Addl. Commissioner (AR), t....
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....f the 'Franchise Service' for the period of dispute. It is not in dispute that the appellant adopted only the registration fee as the taxable value and did not include the royalty as part of the taxable value. We are also not impressed with the plea of limitation inasmuch as (i) collection of royalty by the appellant from the franchisee was not disclosed to the department either through the ST-3 returns or otherwise at any point of time prior to the commencement of investigations, which fact is fairly evident from the records and (ii) It is not even the case of the appellant that a copy of the franchise agreement was furnished to the department at any stage prior to issuance of the show-cause notice. The learned counsel is unable to tell us....