9911796707
TMI Blog2018 (2) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... their storage tank at Kakinada Terminal to the fertiliser plant of Nagarjuna Fertilizers and Chemicals Limited (hereinafter referred to as NFCL) under the terms and conditions of Fuel Supply Agreement, dated 01.06.1996. For the purpose of supply of said naphtha, appellants had installed their own storage tanks in the premises of NFCL, this naphtha is delivered from the appellant s premises at Kakinada Terminal to storage tanks owned by appellant in the premises of NFCL through pipeline. Under the agreement, delivery of naphtha for the purpose of sale is complete when nafta reaches the storage tanks. Appellant charges NFCL a throughput charge called as delivery assistance of Rs. 135/- per MT which is also recovered through invoices raised o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner (Appeals) has failed to appreciate that the storage tanks in NFCL s premises have been installed and are owned completely by the appellant. Therefore, when the naphtha is transferred to the said storage tanks, it would amount to a transportation of goods from the premises of the appellant to another holding area of the appellant at NFCL s premises. This sort of activity would amount to the appellant providing transportation services, if any, to oneself. The fact that the storage tanks installed at NFCL s premises are owned by the appellant is evident from para 8.0 of the Fuel Supply Agreement dated 01.06.1996. (b) Since the tanks at NFCL s premises were owned by the appellant. Therefore, the naphtha transported through the pipel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice station and the customer is a sale or not, is to be determined taking into account the real nature and material facts of the transaction. Payment of VAT / Sales tax on a transaction indicates that the said transaction is treated as sale of goods." 3. On the other hand, on behalf of the department, Ld. AR ShriGautam Mukherjee supports the impugned order. He submits that there cannot be any doubt that naphtha is being transported through a pipeline specially laid for the purpose. Hence, the throughput charge or delivery assistance charge will become taxable value for the service of transportation through pipeline service, and therefore there will definitely be service tax liability on the said amount. 4. Heard both sides and have gone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete 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 notification No. 6/2002-CE. However, in case there had been no such exemptionand duty liability was required to be discharged, it would appear to reason that appellants would include the throughput charge for sale and delivery of naphtha at the recipient end for the purpose of arriving at assessable value and would be required to discharge any central excise duty liability on such consolidated value. 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 opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to agreed price of chlorine for quantity supplied through pipeline. The admitted facts of the case are that the appellant is manufacturing and selling chlorine through pipeline to M/s. Gwalior Chemical Industries Limited. The place of delivery is pre determined as delivery point of pipeline at the recipients end. In other words the sale and delivery of chlorine happens on the pipeline delivery point of the recipients side. In this context the appellants have rightly calculated the cost of transportation through pipeline in their assessable value of chlorine for central excise purpose. The appellants are selling chlorine and upon delivery of chlorine through pipeline at the buyers end, the transaction is concluded. The pipeline is laid and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
