2017 (12) TMI 20

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.... is a Public Sector Undertaking owned by the Government of India. They are engaged in marketing of petroleum products. The appellants purchased Compressed Natural Gas (CNG) from Indraprastha Gas Limited (IGL) and, thereafter, sold the same to their dealers. When the gas is supplied to the vehicles, the product has to be maintained at a particular pressure. Since the gas reaches these sale outlets through pipeline, it is not in the compressed form and therefore, the gas has to be compressed before it is actually sold, In the various retail outlets of the appellants, the space has been provided to IGL to install their machinery, equipment, etc. for compression and IGL sells the gas to the appellants on payment of excise duty. Since compressio....

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....required to pay all municipal taxes, property taxes, rents, etc., where the retail outlets operate. As one of the conditions for sale of goods, the IOCL shall pay to IGL, the retail price, as reduced by the amount of commission for the actual quantity of CNG sold and statutory taxes, if deducted, to be remitted to the concerned authorities. The current retail price applicable on the date of this agreement and break up thereof is specified. All statutory taxes, duties and cesses payable or levied on sale of CNG shall be collected by IOCL and paid to IGL. Further, in consideration of the services provided by IOCL, IGL shall agree to pay to IOCL commission as may be agreed between the parties from time to time. On the basis of the said clause ....

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....client for marketing or promotion of the goods to third party. In these cases, appellants themselves are buying goods from M/s. MGL. Therefore, the question of rendering the service to the client for marketing of the goods does not arise. We further find that MGL is discharging VAT/ST liability while selling the CNG to appellants. Although the RSP is fixed but it does not mean that the profit margin shall be constituted as commission for rendering the service. On examination, it is found that all the transactions shown by the appellants are done on principal to principal basis. Moreover, the appellants are selling these CNG on payment of VAT/ST to the buyers. There is no commission component that have been received by the appellants from M/....