Hon'ble BHAGWATI, J.—Challenge in this writ petition is to the order dated 28th March, 2012, whereby the Commissioner, Central Excise (Appeals), Jaipur-II, disposed of the stay application of the petitioner directing him to deposit the entire amount of service tax Rs. 12,13,821/-, interest and 50% of penalties, within four weeks of receipt of the order and submit evidence thereof to the concerned Range Superintendent under intimation to his office, failing which the appeal shall be liable for rejection for non- compliance of provisions of Section 35F of the Central Excise Act, 1944 and on deposit of this amount only, the recovery of rest of the amount of penalties shall remain stayed till disposal of the appeal.

2. Adumbrated in brief, the facts of the case are that the petitioner is a Society established solely for educational purposes. It has been running international renowned schools namely Mayo College, Mayo College Girls School and Mayoor School in Ajmer. The object of the petitioner Society is to establish schools/colleges in India on the lines of the progressive independent schools/colleges established in England and other countries, open to all without distinction of race, creed, caste or social status with a view to develop an atmosphere of Indian tradition, culture and social environment, best features of progressive independent colleges, the building up of character, team work, physical development and spirit of chivalry fair play and straight dealing; to develop a spirit of Indian nationality by removing all social communal, religious or provincial prejudices among the students and fostering a spirit of comradeship among them and to develop a spirit of service to Society. Based on these objectives, the petitioner entered into an agreement with four institutions for the purpose of establishment of schools in different parts of India, namely Mayoor Foundation, Jalandhar; Taparia Foundation, Bhopal; V.R. Educational Trust, New Delhi; Mayoor School, Noida; and K.C. Gurukul, Jammu & Kashmir. It is stated that intelligence collected by the Anti Evasion Wing of Central Excise Division, Ajmer, revealed that the petitioner was engaged in providing 'franchise service' to various parties/schools, who were running their institutes using its school name “Mayoor School”. On scrutiny of record submitted by the petitioner, it came to notice that they had received franchise fee / collaboration fee in their books of account from various parties/schools. The service provided by the petitioner was classified under Section 65(105)(zze) of the Finance Act, 1994. During the period from 14.12.2005 to 09.07.2010 the petitioner had received Rs. 1,09,23,500/- by providing franchise service. The petitioner was issued a show cause notice on 21.10.2010 proposing recovery of the service tax. The petitioner filed its written submission on 23.12.2011. The matter was adjudicated on 22.12.2011, wherein demand of service tax amounting to Rs. 12,13,821/- was confirmed along with interest. Penalties under Sections 76, 77(1)(a), 77(2) and 78 of the Finance Act, 1994 were also imposed.

3. Aggrieved with the order dated 22nd December, 2011, the petitioner-appellant filed an appeal before the respondent no.1 Commissioner, Central Excise (Appeals), Jaipur-II, together with a stay application imploring to dispense with the pre-deposit of service tax, interest and penalties.

4. The petitioner-appellant filed an appeal on the ground that the petitioner-appellant was a non-profit society and entailed in non-commercial activities. They were registered under Income Tax Act, as Society for educational purpose. It did not fall in the net of service tax. The petitioner entered into an agreement with aforesaid four institutions for establishment of schools. These institutions are either societies or trust. The petitioner collaborated with them for setting up of schools. The petitioner contended before the respondent no.1 that merely permitting other societies/trust to

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