TaxTMI 
TaxTMI 
2024 (9) TMI 1953
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....zing Marketing Margin on which no Service Tax was being paid. The Show Cause Notice was issued demanding Service Tax on these Services. After due process, the Adjudicating Authority confirmed the demand. 2. The Ld. Advocate submits that this issue is no more res integra. 2.2 In the case of the same appellant, vide Final Order no. 75233-75235/2024 dated 8.2.2024 it has been held as under: In all the appeals, the issue is common, therefore, all are disposed off by a common order. 2.1 During the course of Audit, it is evident that the appellant is receiving consideration in the form of Minimum Demand Charges (MDC) for gas transportation from their customers during the period when the total consumption of gas irrespectiv....
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....elow 90% of the yearly booked quantity of gas. As such, the collection of MDC from their customers, which is a form of quantity and not utilized the gas, therefore, the same cannot be termed as the provision of service and the said charges are also conditional after 90% of the quantity of gas. Therefore, the same cannot be terms as service provided by the appellant. Further, with regard to realization of the sale value of gas on behalf of M/s Oil India Limited from the purchasers/consumers of gas along with Royalty an Marketing Margin, they are not liable to pay service tax as held by this Tribunal in the case of GAIL India Limited Vs. Commissioner of Central Excise, Delhi reported in 2018 (8) GSTL 64 (Tri.-Del.). 6. We find that t....
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....rketing margin indicated in their sale invoices of natural gas. The Revenue contended that marketing margin is relatable to the activity of transportation of gas. We are not in agreement with such proposition. The admitted facts are that appellants are engaged in marketing natural gas. They have pipelines for transmission of the natural gas to various destinations. 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 16-4-2008 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 po....
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....he original authority apparently gave finding on the tax liability because the transportation charges are suffering Service Tax in respect of sale transaction. This by itself will not justify the Service Tax liability on marketing margin. There is no service by the appellant to the buyer of gas, independent to the sale transaction, as the sale transaction and 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 actu....