Easy Bill Ltd. Vs CCE (CESTAT Delhi)
Section 9.1 thought talks about the agreement to be on principle to principle basis as impressed upon by learned DR but perusal of this section reveals the subsequent portion explains that word principle to principle mean that the agreement is not intended to constitute a partnership, joint venture or employer employees relationship between the company and the retail agent. Thus we are of the opinion that mere use of word ‘principle to principle’ basis cannot be read for the impugned arrangement between appellant and his agents to be called as franchise service. More so for the reason that Section 9.2 of the same article categorically restricts the agent to acquire any representational right in the following words: ” Nothing contained in this agreement shall authorise the retail agent to make representations or incur any liability on behalf of the company”.
Perusal of the above discussed terms of the agreement give us a clarity to hold that the payment of Rs. 15000/- is not at all the consideration towards the purchase of Representational Rights by the agent from the Appellant. Contrary thereto the arrangement herein is that payment to be made by the Appellant to the agent per Bill basis. This particular term of agreement is absolutely against the intent of what can be called as franchise service.
In view of entire above discussion, we hold that the adjudicating authority below have committed an error while giving interpretation to the word ‘franchise service’. The authorities have failed to observe the actual intent of the agreement involved. The order-under-challenge, therefore, is held as not sustainable in the eyes of law.
FULL TEXT OF THE CESTAT JUDGEMENT
This order disposes of two appeals, the appellant and the issue involved being same for both the appeals.
2. The relevant factual matrix is that :
The appellant M/s Easy Bill Ltd. is engaged in providing an efficient and easily assessable payment collection services for the bill issuers for the collection of payments from the customers who wish to settle their bills from the bill issuer over the counter. On the basis of specific intelligence gathered by the Service Tax Commissionerate the records of the appellant were checked and it was observed that they have entered into Retail Agent Agreements with various retailers for providing licenses for opening shops in its names i.e. Easy Bill Ltd. and have collected the service fee from them. It is alleged that the said service fee is taxable under the category of ‘Franchise Service’ as defined under Section 65 (47) of the Finance Act, 1944. Alleging that the appellant has evaded payment of service tax on the amount collected by them that 4 different show-cause notices were issued to the appellant. The respective details are as follows:
