Page 189 - ELT_3rd_1st May 2020_Vol 372_Part

2020 ] MANIPAL UNIVERSAL LEARNING PVT. LTD. v. COMMR. OF C. EX., MANGALORE 411

providing auxiliary education services in relation to distance educa-
tion programme of the University; this MOA was not in the nature
of “franchise” as defined in Section 65(47) as it stood both prior to
16-6-2005 and post 16-6-2005 amendment; there was no “representa-
tional right” granted to the Appellant; so is the case with the agree-
ments entered by the Appellant with parties of Learning Centres
under LCAs; the thrust of the MOA and LCA was to provide infra-
structure facilities and services in relation to distance education
programmes. Senior Counsel avers that there is nothing in the im-
pugned order to establish that the ingredients of the definition of
“franchise” in Section 65(47) are present or satisfied; there is no
“royalty” received towards any “franchise service”; insofar as the
activity of supply of VSAT equipment is concerned, the same was
not towards any rendering of “franchise service”. He places reliance
on the following.
(i) KEHEMS Consultants Pvt. Ltd. v. CCE, 2015 (39) S.T.R. 682
(Tri-Del.);
(ii) Centre for Development of Advance Computing v. CCE, 2016 (41)
S.T.R. 208 (Tri-Mum.);
(iii) Delhi International Airport Pvt. Ltd. v. UOI, 2017 (50) S.T.R. 275
(Del.);
(iv) CST v. Bharat Petroleum Corporation Ltd. 2018 (10) G.S.T.L. 364
(Tri-Mum.) affirmed in 2019 (24) G.S.T.L. 347 (Bom.)
(v) Franch Express Network (P) Ltd. v. CST, 2008 (12) S.T.R. 370
(Tri-Che.).
7. Learned Senior Counsel submits that the scope of “franchise service”
is also clarified by the Board vide Circular No. 59/8/2003-S.T., dated 20-6-2003;
impugned order has not considered the above in perspective; they had supplied
VSAT equipment to parties running Learning Centres for which they charged
one-time VSAT Management Fee; this amount is not towards any “representa-
tional right” but towards supply of ‘goods’ viz., VSAT equipment; this cannot be
construed as consideration towards “franchise”; reliance is placed on the deci-
sion in IMA Mental Arithmetic Academy Pvt. Ltd. v. CST, 2019 (22) G.S.T.L. 234
(Tri-Che.). The impugned order is not tenable in law.
8. Learned Senior Counsel submits that in terms of Para-4.5 of LCA, the
Appellant provides VSAT to Learning Centres and they charge one-time fee for
the same called as VSAT Management Fee; this is nothing but supply of tangible
goods; as regards VSAT usage fee charged and collected by the Appellant, it was
reimbursement of expenses incurred towards transmission of information;
VSATs work on the basis of internet/telephone connection for disseminating
information/data during distance education programme by Learning Centres;
for this purpose, the Appellant has taken services of telecommunication from
Airtel India Ltd. who invoice/bill the Appellant for data usage charges which are
recovered by the Appellant from the Learning Centres as reimbursements; this
again has nothing to do with “franchise service” but only a reimbursement of
telecommunication costs/expenses; this was clearly explained by the Appellant
to the Department vide their letter dated 27-11-2007, which was not appreciated
the facts in perspective; at any rate reimbursement of expenses cannot be brought
to tax in view of the judgment of the Delhi High Court in Intercontinental Consult-
EXCISE LAW TIMES  1st May 2020  189