TMI Blog2014 (7) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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/s MGL. The decision in the case of Bhagyanagar Gas Ltd. (2012 (9) TMI 860 - CESTAT BANGALORE) wherein this Tribunal held that mere mention in the agreement the trade margin as commission on which VAT/ST has been paid would not evidence the fact of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicles, 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 MGL to install their machinery, equipment etc. for compression and MGL sells the gas to the appellants on payment of excise duty. Since compression of gas takes place at the retail outlets, these retail outlets are registered as premises for the purpose of excise duty in the name of MGL, who actually undertake the activity of compression and excise duty is discharged by MGL on the compressed gas sold at the retail outlets. There are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Business Auxiliary Services as defined under section 65(19) read with Section 65(105)(zzb) of the Finance Act, 1994. Accordingly, the levy of service tax along with interest and various penalties under the Finance Act, 1994 have been proposed by way of issue of show-cause notices. The show-cause notices were adjudicated and the demands of service tax along with interest are confirmed and various penalties under section 76, 77 78 of the Finance Act, 1994 were also imposed. Aggrieved from the said orders, appellants are before us. 5. Shri M.H.Patil, ld. Counsel for the appellant submits that the transaction involved in the present case is one of sale and not of service. He submits that the appellants purchased CNG from MGL and sold the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther hand, ld. AR appearing on behalf of the revenue submits that from the agreement entered into between the appellants and MGL, it is seen that the appellants are required to provide certain services such as earmarking specified area; making available utilities such as water, power etc., operating the equipment with the support of competent staff, etc. These activities in fact enable the supplier, MGL to sell their goods and, therefore, it would amount to marketing or promotion of the goods of the client. Hence, they are liable to pay service tax under the category of Business Auxiliary Service. He further submits that MGL is also selling CNG through private parties who are paying service tax on the profit margin retained by them. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom MGL. In fact, the appellant are also paying VAT on ₹ 2/- also. It is also a fact that the appellants are not receiving any commission from M/s MGL. Moreover, the case law relied upon by the counsel in the case of Bhagyanagar Gas Ltd. (supra) also supports the cases in hand, wherein this Tribunal held that mere mention in the agreement the trade margin as commission on which VAT/ST has been paid would not evidence the fact of rendering service. The contention of the ld. AR that the private parties are paying service tax under the category of Business Auxiliary Service on the same activity, therefore, the appellants are required to pay service tax is not acceptable as in the case of private parties, the invoices on the customers wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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