TaxTMI 
TaxTMI 
2017 (9) TMI 893
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....einafter referred to the PG) PG is the owner of a system for operation of hotels under the brand names 'Park Inn', Park Inn International', 'Park Plaza', and 'Park Plaza International'. The said agreement grants exclusive rights to the appellants to develop hotels in India which includes the rights to use the names 'Park Inn', 'Park Inn International', 'Park Plaza', and 'Park Plaza' International as well as to use the system of hotel management. As per the agreement, the appellants are required to pay the amount of Commitment Fees, Monthly Royalty Fees, Reservation Fees and Advertising Fees. In view of the territorial license granted, the appellant enters into hotel management agre....
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....outset, submits that the demand is not sustainable on the ground of revenue neutrality, as the service tax paid/to be paid on the service of so called franchisee service is admissible as cenvat credit to the appellant. He submits that the service of PG, USA is clearly subsumed in the overall output service provided by the appellant to their clients i.e. various hotels in India, therefore Cenvat Credit is clearly admissible. The learned Counsel further submits that the appellant during the relevant period i.e. 2005-06 to March 2010 has paid the service tax of Rs. 7,31,04,837/-. He referred to the Annexure 9 of the appeal placed at page No.441 from which he submits that this amount of Rs. 7,31,04,837/- was paid in cash through challan. In the....
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....sioner of Central Excise & S.T.-I, Mumbai - 2016 (42) STR 772 (Tri.-Mumbai). He further submits that demand on the amount of advertisement fees is not an amount under the contract with PG and moreover such amount is not remitted, therefore the same is not liable to service tax. Further this amount of 1% towards Room Sales as advertisement fees has been charged to service tax when the overall amount recovered from the hotels. The confusion created in the mind of the adjudicating authority only on the basis of an amount of Rs. 2,85,80,687/- which was shown as advertisement expenditure in the balance sheet. This is normal expenditure in the course of business and on this expenditure which is incurred by the appellant there cannot be any servic....
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....otice has apparently erred to allege that the appellant did not disclose the transaction carried under the territory licence agreement to the department. He further submits that the enquiry was made for agreement entered into with Carlson Hospitality Worldwide and not Park Global. However the appellant disclosed transaction with M/s. Park Global Holdings Inc, USA also which shows the bonafide of the appellant, therefore the demand for extended period is not sustainable. In this regard, he placed reliance on the following judgments. (i) Reliance Industries Ltd. Vs. Commr. of C. Ex., & S.T., LTU, Mumbai - 2016 (44) STR 82 (Tri.-Mumbai) (ii) Nirlon Ltd. Vs. Commissioner of Central Excise, Mumbai - 2015 (320) E.L.T. 22 (S.C.) (iii) Jay....
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....venue reiterates the findings of the impugned order. He submits that the appellants are authorized by PG to provide services by the brand name of PG for which they are charging fees. This makes very clear that by using the brand name of PG and allowing the various Indian Hotels to use the same, the appellant has been granted representational right by the PG for providing services to Indian Hotels. Therefore the services clearly falls under franchise service, hence it is taxable. 4. We have carefully considered the submissions made by both the sides. On hearing both sides we find that the appeal can be disposed of on the point of revenue neutrality. In this regard, we observed that the so called service of Franchise was provided by PG, US....