2025 (6) TMI 1171 - AT - Service Tax

Levy of service tax - terminalling charges collected by the appellant - period involved is from 2011-2012 to September-2014 - HELD THAT - In view of the stated position which has been checked from the field unit in the appellant s own case the same issue was raised and terminalling charges were dropped by the adjudicating authority. The matter was not carried forward in appeal despite there being no bar of revenue implication. This court is inclined to allow the benefit to the appellant as the terminalling charges are nothing but part of the cost component of excisable goods and having been incurred in loading and unloading goods within the factory. Therefore being a part of the cost and hence part of the transaction value same cannot be considered as being a separate service. Therefore the service tax per se cannot be demanded from the appellant. Appeal allowed.

Summary

Summary:The Appellate Tribunal (CESTAT Ahmedabad) addressed whether service tax was payable on terminalling charges collected by the appellant for LPG sales in the domestic area during 2011-2014. The department contended these charges were taxable as "Business Auxiliary Services," included in the basic price of LPG, which was exempt from service tax.Relying on the Supreme Court ruling in CCE Vs. Grasim Industries Limited (2018 (5) TMI 915), the appellant argued that terminalling charges formed part of the transaction value subject only to excise duty, not separate service tax. The Tribunal also referenced CCE Vs. Jubilee Fabrics Pvt. Ltd. (2007 SCC Online CESTAT 2901) and CBEC Circular 139/8/2000-CX, confirming that processes within factory premises not amounting to manufacture are included in excisable value.The Tribunal noted that in the appellant's prior case, the Commissioner had dropped the show cause notice regarding terminalling charges, accepted by the Revenue without appeal. Given this and the position that terminalling charges are part of the cost and transaction value of excisable goods, the Tribunal held that "the service tax, per se cannot be demanded from the appellant."Accordingly, the appeal was allowed with consequential relief.