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M/s. Hindustan Petroleum Corporation Ltd. Versus CCE, Delhi-II, Gurgaon

2018 (2) TMI 843 - CESTAT NEW DELHI

Business Auxiliary Service - appellant entered into one such agreement with IGL for giving facility of selling CNG through their outlets; accounting and selling of the said CNG - Revenue entertained view that the considerations received by the appellant from IGL are in the nature of commission for rendering Business Auxiliary Service in terms of Section 65(19) of the Finance Act, 1994. - Held that: - similar set of facts has been a subject matter of decisions of this Tribunal in the case of .....

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pal basis. - The service tax liability under BAS cannot be sustained against the appellant - appeal allowed - decided in favor of appellant. - Service Tax Appeals Nos. 59270/2013 and 53654/2014 - Final Orders Nos. 50601-50602/2018 - Dated:- 12-2-2018 - Hon ble Mr. Justice (Dr.) Satish Chandra, President And Hon ble Mr. B. Ravichandran, Member (Technical) Shri Narender Singhvi, Advocate for the appellants Shri Amresh Jain, AR for the respondent ORDER Per B. Ravichandran These two appeals are .....

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) from natural gas and its further distribution in and around Delhi. IGL supplied CNG to various similarly placed Public Sector Undertakings Oil Companies including the appellant. The contracts envisaged the oil marketing companies in buying CNG in bulk on discount for sale. The appellant entered into one such agreement with IGL for giving facility of selling CNG through their outlets; accounting and selling of the said CNG. The appellant obtained certain considerations, which were claimed as di .....

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rvice tax liability and also imposing penalties under Section 77 and 78 of the Finance Act, 1994. 3. Ld. Counsel appearing for the appellant submitted that the appellant has purchased CNG from IGL and they sold the same to the different buyers. A perusal of the agreement will clearly show that the amount, which is sought to be taxed, though termed as commission‟ is in reality only a discount from the price of gas payable by the appellant to the IGL. Such discounts on a sale transactions ca .....

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commission in the agreement. The name commission cannot be construed to understand the transaction as commission agent‟s work. The ld. Counsel relied on the decision of the Tribunal in the appellant‟s own case with reference to similar agreement in Bharat Petroleum Corporation Ltd. - 2014- TIOL-1114-CESTAT-MUM. He also relied on the decision, on an identical dispute, in the case of Indian Oil Corporation vide Final Order No.57596- 5757/2017 dated 6.10.2017. In this case, the Tribuna .....

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ctions between the appellant and the IGL. 5. We have heard both the sides and examined the case records. 6. We have also examined the terms of the agreement between the IGL and the appellant. At the outset, we note that similar set of facts in respect of appellant‟s own case in Mumbai and for IOCL with IGL has been a subject matter of decisions of this Tribunal. The said decisions relied upon by the appellant are relevant to decide the present case also. In the case of IOCL (supra), the Tr .....

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L. Therefore, the question of rendering the service to the client for marketing of the goods does not arise. We further find 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 CN .....

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llants are not receiving any commission from M/s. MGL. Therefore, it cannot be presumed that appellants are rendering any service to 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 payi .....

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