TaxTMI 
TaxTMI 
2019 (4) TMI 1808
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.... brands of Indian Made Foreign Liquor (IMFL) and alcoholic beverages in India. The appellant was getting the goods manufactured from the various entities, which possesses the necessary liquor manufacturing licence from the respected state governments. The terms of the agreement between the appellant and the manufacturer namely the bottler are as follow: "The bottler purchase all the raw materials and packing materials and undertakes manufacture. The bottler procures specified and approved raw materials and packing materials from suppliers located by assessee; - The bottler undertake blending of raw material and concentrates, manufactures liquor in accordance with the standards laid down from time to time by the assessee; ....
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.... dated 06.10.2009 demand is under category of 'Franchisee Service' ; (iv) SCN C.No. D-III/ST/R-V/SCN/Seagram/295/08/4443 dated 08.08.2010 demand is under 'Franchisee Service' ; (v) SCN C.No. D-III/ST/R-V/SCN/Seagram/295/08/4443 dated 21.09.2011 demand is under 'Franchisee Service'. In all the above show cause notices, the demand has been made by the department under 'Franchisee Service' and in total, a service tax demand amounting to Rs. 42,22,18,962/- has been demanded and reversal of the cenvat credit amounting to Rs. 53,99,881/- has also been made. The above mentioned five show cause notices have been adjudicated by the learned Commissioner by his order-in-original no. 41-45/AKM/CST/ADJ/2013 dated 03.07.2013, where u....
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....mount to providing any franchisee service to the bottling units. The learned advocate further elaborated that the decision of this Tribunal is on the basis of the CBEC circular no. 249/1/2006-CX4 dt. 27.10.2008, wherein it has been clarified that the applicability of service tax on the different types of arrangements between the owner of IMFL brand and the bottlers and under contract bottling arrangements, it is the bottlers who provide services to the brand owners. With regard to the demand of service tax amounting to Rs. 53,99,881/-, it has been submitted by the learned advocate that the demand of Rs. 39,16,900/- is based on premise that during the month of July 2003 to April 2006, the appellant had utilized credit in excess of 20% of the....
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....to the CBU from the appellant. The CBU has no claim whatsoever on the rights of the appellant. The nature of transaction between the appellant and CBU indicates that the appellant to use the brand on his own account and there is no representational right given to the bottling unit for the brand name. The commercial interest of the bottling unit is to earn the consideration for bottling or manufacturing the alcoholic beverages. The appellant uses the bottling units for producing the said beverages in their brand names for sale in profit. The said activity has been dealt with by the CBEC in their Cir No. 332/17/09 TRU dated 30.10.2009. 10. After going through the Board's Circular dt. 30.10.2009 deals with the situation in this matter....
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....ore, for the services received prior to 18.04.2006, the appellants are not liable to pay service tax. As the said issue of liability was settled by the Hon'ble High Court of Bombay in the case of Indian National Ship Owners Association (supra) which was confirmed by the Hon'ble Supreme Court. Therefore, the demand is not sustainable on that count also." 7. Since the facts of this matter are similar to the one decided by the above mentioned decision of this Tribunal, after follow the same, we hold that the demand under category of 'Franchisee Service' confirmed by the adjudicating authority by the impugned order-inoriginal is not legally sustainable; therefore, we set aside the same. 8. So far, as the demand of service tax amounting to....
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....his issue. We take note of the facts that in a similar case of Idea Cellular Ltd vs. CCE, Rohtak - 2009 (16) STR 712 (Tri. Del), this Tribunal has held as under: "4.2 The Appellant have pleaded that if the 20% ceiling on utilization is applied only to credit of services other than the services covered by Rule 6(5) and credit of inputs goods other than capital goods, utilization of credit for payment of service tax, in excess of the ceiling has taken place only in January 2005, March 2005 and May 2005 and this excess utilized credit cannot be demanded as Rule 6(3)(c) is silent with regard to the period during which the 20% credit shall be utilized and in this regard reliance has been placed on Tribunal's judgment in case of Vi....