Terminalling charges within factory premises were treated as part of transaction value, not a separate service tax levy.

Terminalling charges collected for loading and unloading LPG within the factory premises were held to form part of the cost component and transaction value of the excisable goods. Because the charges arose in connection with sale and handling of LPG inside the factory, they could not be split out and taxed separately as Business Auxiliary Services. The Tribunal also noted that the same issue had earlier been dropped in the appellant's own case and the Revenue had not pursued it further, supporting the view that no distinct service tax levy was warranted. The demand for separate service tax therefore failed.

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Issues: Whether terminalling charges collected for loading and unloading LPG within the factory premises were separately liable to service tax as Business Auxiliary Services, or whether they formed part of the cost and transaction value of the excisable goods.

Analysis: The charges were collected in connection with the sale and handling of LPG within the factory premises. The Tribunal noted that in the appellant's own case the same issue had earlier been dropped by the adjudicating authority and the Revenue had not carried the matter further. On that basis, and treating the terminalling charges as part of the cost component and transaction value of the excisable goods, the Tribunal held that the amount could not be split out as a distinct service for levy of service tax.

Conclusion: The terminalling charges were not separately exigible to service tax and the demand failed.

Ratio Decidendi: Amounts forming part of the cost and transaction value of excisable goods, when incurred for handling within the factory premises, cannot be subjected to a separate levy as an independent service.

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