2018 (3) TMI 630

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....x, New Delhi. 2. The brief facts of the case are that, the assessee-Appellants are engaged in trading and transportation of natural gas. They entered into contracts for sale of natural gas with various clients. They have transported the gas for sale up to the point of delivery. In terms of agreement, the assessee-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 appeals relates to the includability of marketing margin charged by the assessee-Appellants, in the taxable value for the services of transportation of gas through pipeline in terms of Section 6....

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....ations. They have entered into gas sales contract with their clients. A perusal of sample sales contract will indicate that the sale of such gas gets 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....

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....nd the delivery point has been clearly defined in terms of the contract. The value liable to VAT is also clearly identified. The marketing margin is 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 befo....