TaxTMI 
TaxTMI 
2017 (9) TMI 554
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....or sale up to the point of delivery. In terms of agreement, the appellants indicated three charges in the invoices; the price of gas, marketing margin and transportation cost. They have paid VAT on the entire invoice value and paid Service Tax only on the transportation cost. The dispute in the present appeal relates to the includability of marketing margin charged by the appellant, in the taxable value for the services of transportation of gas through pipeline in terms of Section 65(105) (zzz). 2. The original authority held that the marketing margin charged by the appellant from their customers is a consideration for transportation of gas and is required to be included in the gross value of taxable service. Accordingly, a Service Tax dem....
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....ged as per industry practise. The collection of marketing margin is approved by the Ministry of Petroleum and Natural Gas. 4. The ld. Counsel placed reliance on the decision of Hon'ble High Court in Krishak Bharti Cooperative Ltd. - 2012 (27) Taxmann 304 (Guj). The High Court examining similar contract held that the entire contract is one of sale and the transportation activity undertaken is in pursuance of the obligation in the sale contract. In the appellants own case in respect of other units, the demand raised by the department of marketing margin has been dropped at the adjudication level itself. 5. The ld. Counsel contested the demand on the question of limitation also. The department was aware about the activities undertaken by the....
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.... effected at the delivery point to the client. Article 4 of agreement dated !6.04.2008 clearly indicates that the gas sold and transported to the buyer pursuant to the contracts shall be delivered by the seller to the buyer at the delivery point at buyer's premises/facilities at Jagdishpur. Article 10 of the terms and conditions of the agreement gives details regarding pricing and billing. Admittedly, the appellants paid VAT on the full consideration of their invoice value. We note that while the original authority has taken of this fact, still held that as the appellant was charging and paying Service Tax on the component of transmission charges for providing transportation services to their customers, Service Tax on marketing margin also ....
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....considered as part of sales transaction value and subject to VAT. After the change of ownership of gas, there is no consideration attributable to any service from the seller to the buyer. In other words, any services or activity prior to actual sale of gas has no two persons identifiable as service provider and service recipient. The activities and services by the appellants prior to actual sale, are for self. We also note that in respect of appellant, in others jurisdiction, proceedings were initiated to demand Service Tax on various activities undertaken with reference to the natural gas before sale. The jurisdictional authorities after examining the sale agreement, categorically held that the charges received by the appellant are part of....