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2020 (9) TMI 651 - AT - Service TaxLevy of Service Tax - Transportation of Goods through Pipelines / Conduit Services - the transportation charges are being separately recovered from the buyers in addition to the base price of crude oil - HELD THAT:- The question of service tax levy would arise only in the situation covered in the former case and not definitely in the later case. We find that the whole purpose of the arrangement is to execute the sale transaction in terms of MOU entered by the appellant with the customers like Indian Oil Corporation, for purchase and sale of crude oil, sample copies of which are annexed with the appeal paper book. We are of the view that had there been no arrangement for sale of crude oil to the buyer oil companies, there would have been no case for the appellant assessee to undertake the transportation of goods. It is only in order to honour the mandate of sale transaction to deliver the goods at delivery point, the transportation activity has been undertaken by the appellant assessee. The learned Commissioner has categorically accepted the fact that the appellant is under contractual obligation to supply and deliver the goods at the buyer's premises which has been referred as 'Custody Transfer Point' or the point of delivery. However, he confused the whole matter with the concept of "place of removal" to hold that the transportation charges is not liable to be included in the value of crude oil, which is not the subject matter of dispute herein for the reason that the demand in this case is not on the crude oil but on the transportation charges which though separately recovered is to solely honour the sale transaction by delivering the goods at the buyers premises. Thus, the transportation of crude oil has been undertaken by the appellant assessee in the capacity of being a seller not a service provider. Further, since there is no service provider - service recipient relationship, there cannot be any question of service tax levy and thus, the demand cannot be sustained - appeal allowed - decided in favor of appellant.
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