NEERAJ PRASAD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE facts leading to filing of this appeal and stay application are, in brief, as under: -

(2.) SHRI B.L. Narsimahan, ld. Advocate for the appellant pleaded that the appellant had entered into a franchise agreement with CLIL and using the brand name of CLIL and methodology adopted by CLIL, were operating the commercial and training centres of CLIL, that the appellant were collecting the fee for the various courses on behalf of the CLIL and were depositing the same in CLIL's account, that the receipt for the course were being issued by CLIL and it is CLIL who were paying service tax on the fee for the courses being received from the students, that the appellant for operating the coaching and training centres were only getting an amount of 25% of the fee, that the appellant are a sort of sub -contractor for CLIL and since CLIL were paying service tax on the full value of the fee received for the courses being organized, the appellant would not be liable to pay any service tax, that in this regard he relies upon the Board's Circular No. , dated 23 -2 -2009 wherein the Board has clarified that the revenue sharing arrangement is not liable to service tax, that the appellant are not operating the professional coaching centres on behalf of CLIL, as the transaction between the appellant and the CLIL are on principal -to -principal basis and hence the appellant cannot be said to have provided a services on behalf of CLIL, that for charging service tax in terms of Section 65(19)(vi) read with Section 65(105)(zzb) of the Finance Act, 1994. It has to be proved that the services has been provided on behalf of the client, that the term "on behalf of connotes an agency arrangement, that from the appellant's agreement with CLIL it is clear that the appellant are not an agent of CLIL, that even if it is held that the services provided by the appellant to CLIL is business auxiliary services, the same would be exempted from service tax under Notification No. dated 10 -9 -2004, as amended from time -to -time, that in any case when CLIL have paid service tax under Section 65(105)(zzc) on the amount received by them from the students through the appellant from the students attending the courses, the service tax cannot be charged once again on a part of that amount which is being received by the appellant from CLIL, that in this regard, reliance is placed on the Newton Engg. & Chemicals reported in : 2008 (12) S.T.R. 378 (T) and Semac Pvt. Ltd. v. CST, Bangalore reported in : 2006 (4) S.T.R. 475, that the entire exercise is revenue neutral, as even if the service tax is paid by the appellant, its Cenvat credit would be available to the CLIL, that the bulk of the tax demand is time barred, as the longer limitation period is not available to the department for the reason that the appellant have not suppressed any relevant facts from the department, that the appellant have a strong prima facie case and, hence, the requirement of pre -deposit of service tax demand, interest thereon and penalty may be waived for hearing of the appeal and recovery thereof may be stayed during the pendency of the appeal.