TMI Blog2018 (2) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... value, so also under the agreement, the sale by the appellant to NFCL is complete only when naphtha reaches the storage tanks. The appellant is not required to discharge excise duty liability on the sale of naphtha made to NFCL by availing N/N. 6/2002-CE. Just because there is no excise duty liability in respect of the impugned clearances, the attempt of the department to collect service tax in respect of throughput charges, in our opinion, will not pass muster. Reliance placed in the case of M/s. Grasim Industries Ltd. Versus C.C.E. Indore [2016 (5) TMI 87 - CESTAT NEW DELHI], where it was held that The transport of chlorine through pipeline is done by the appellant in their own account and the delivery on sale is made to the buyer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- per MT which is also recovered through invoices raised on them as sale value of naphtha. Appellants have claimed benefit of exemption under notification No.6/2002-CE, dated 01.03.2002 which exempts excise duty on clearance of naphtha to fertiliser manufacturers. Accordingly, appellant cleared naphtha to NFCL without payment of excise duty. However, in case of any loss of goods during transportation, appellant have paid excise duty on the loss quantity value. Department took the view that delivery of naphtha from appellant s terminal to NFCL storage tanks through pipeline amounts to providing taxable services under the category transportation of goods through pipeline and that therefore the amount of ₹ 135/- per MT collected for thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e owned by the appellant. Therefore, the naphtha transported through the pipeline was delivered to a unit of the appellant itself. It is submitted that where a service to self is performed, no service tax can be liable on the said transaction. In support of the above view, reliance is placed on the following decisions: (i) Precot Mills Ltd v. CCE, Tirupati [2006(2)STR 495 (Tri.)] (ii) CMS (I) Operations Maintenance Co. Pvt. Ltd. v.CCE, Pondicherry [2007 (7)STR 369 (Tri.) (c) It is not disputed by the Revenue that the appellants have paid sales tax on the value of throughput/delivery charges since it forms part of the sales transaction. Once an activity is part of a sales traction and on which sales tax has been paid then th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice, and therefore there will definitely be service tax liability on the said amount. 4. Heard both sides and have gone through the facts. Both the lower authorities have taken a view that the goods are naphtha and that the service is that of transportation of goods through pipeline service, that both are definitely mentioned in the contract as well as in the invoices, that both are distinctly valued in the contract and the invoices and hence they are liable to Central Excise duty and service tax respectively. The lower appellate authority has expressed a proposition that had the appellants contention that the transaction of sale is not complete till such time the product naphtha reaches the fertiliser plant of NFCL, the transaction val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the impugned clearances, the attempt of the department to collect service tax in respect of throughput charges, in our opinion, will not pass muster. 5.2 While arriving at this conclusion, we draw sustenance from the ratio of the Tribunal decision in the case of Grasim Industries Limited vs. CCE, Indore reported in [2016(45) S.T.R. 65 (Tri.-Del.)]. The facts in that case were that appellants therein had entered into an agreement with M/s Gwalior Chemical Industries Limited for supply of liquid chlorine through pipeline. The department entertained the view that the appellants are liable to service tax for such transport of chlorine through pipeline under the category of transport of gas through pipeline in terms of Section 65(105)(z ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng chlorine and upon delivery of chlorine through pipeline at the buyers end, the transaction is concluded. The pipeline is laid and owned by the appellants. The said pipeline is used for transport and sale of chlorine to M/s. Gwalior Chemical Industries Limited. In these factual background, we find there is no services provider and service recipient with reference to transport of goods through pipeline for charging service tax. The transport of chlorine through pipeline is done by the appellant in their own account and the delivery on sale is made to the buyer. The transportation charges are included as a consideration for sale and to discharge central excise duty. As such we find no justifiable legal basis to sustain any service tax liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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