TaxTMI 
TaxTMI 
2017 (12) TMI 1193
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....cture and sale of various petrochemical products for retail sale of these products. Various sales outlets in the shape of petroleum pumps etc. are established. To operate those dealers are appointed. In some cases the premises and the land is owned by the respondent (Company Controlled Site) while in other cases land is owned by the dealers (Dealer Controlled Site). There are agreements entered between the respondent and the dealers in terms of which the respondent recovered license fees from dealers as follows: Type of Site MS(Rs pr KL) HSD(Rs per KL) Dealer Controlled Site 13 11 Company Controlled Site 43 36 2.2. Ld. AR pointed out that this License Fee was sought to be treated as provisions of Franchise....
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.... this purpose, they collect the licence fee. The aspect about the use of logo of BPCL or the business concept of BPCL or selling only their products can be considered as conditionalities for use of the said petrol pump. Even for the sake of argument, it is accepted that the said licence fee is on account of use of said facilities as well as the other conditionalities (like use of logo) of BPCL mentioned above, in that case, the dominating nature of the service need to be determined. In the present case it is beyond doubt that the dealers are paying the licence fee primarily and mainly for the use of facilities only. The consideration which can be linked to the other aspect like exclusive sale of product of BPCL, use of logo etc. would be ve....
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....y prescribes that the products shall be sold under the name and logo of BPCL which clearly indicates that dealer has been granted representational right to sell such products. Ld. AR argued that the portion of the license fee is obviously in respect of the amount receipt for licence to use the respondents logo. 3. The Ld. Counsel for the respondent relied on the impugned order. He particularly pointed out that such license fee is collected from the company controlled and dealer controlled outlets where the respondent are supplying pumps, storage tanks, pipes, etc. the said license fee is not collected when no outfit is provided. He further argued that identical issues have been decided by following orders in appeal. (a) Order-in....
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....e above clause, it is apparent the purpose of the agreement is to grant rights to use the premises which are ready for operation (as in company controlled outfit) or right to use the storage tanks, pipes, pumps etc. as per design of the respondent (in case of dealer controlled outfit). Thus the preliminary purpose of the agreement would clearly be the grant of rights to use the premises and/or equipment. The said agreement according to Revenue in Clause (10) contents certain conditions which have been relied by Revenue to assert that they turn into the transaction of supply of Franchise Service of Para 10 of the Agreement reads as follows: '10. THE LICENSEES HEREBY COVENANT AND AGREE WITH THE COMPANY AS FOLLOWS:- (b) T....