TMI Blog2021 (3) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The Agreements referred to in this show cause notice are the same Agreements which were referred to in the earlier show cause notice and the same allegations have been made against the appellant. Appeal allowed - decided in favor of appellant. - SERVICE TAX APPEAL NO. 50532 OF 2017 - FINAL ORDER NO. 51163/2021 - Dated:- 22-3-2021 - MR. DILIP GUPTA, PRESIDENT AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Sujeet Ghosh and Ms. Mannat, Advocates for the Appellant Shri Radhe Tallo, Authorised Representative for the Department ORDER This appeal has been filed by Petronet LNG Ltd [ The Appellant ] to assail the order dated December 27, 2016 passed by the Commissioner of Service Tax Delhi-1 [ The Commissioner ] that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the Agreements ranging from 0.66% to 1% of the LNG received by the Appellant. It is necessary to determine the deficiency as the Appellant would have to pay liquidated damages for such deficiency. The obligation, according to the Appellant, is, therefore, to deliver the entire quantity of LNG which has been delivered by the customers minus the quantity agreed upon as allowed loss and consumption for avoiding any liquidated damages. 4. For the regasification activity undertaken by the Appellant, it is specifically mentioned in the Agreements that a regasification charge shall be payable by the customer to the Appellant. The Agreement further provide that the regasification charge with respect to each billing period shall be calcula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 10,000 u/s 77 of the Act on the Appellant. A further penalty of ₹ 1,00,000/- was imposed on Pankaj Wadhwa u/s 78A of the Act. 7. This order dated December 27, 2016 passed by the Principal Commissioner was assailed by the appellant before this Tribunal in Service Tax Appeal No. 52946 of 2016. The Tribunal, by order dated October 21, 2019, set aside the order passed by the Principal Commissioner and allowed the appeal. The portion of the order relevant for the purpose of this appeal is reproduced below: 18. The case of the Department, as set out in the demand cum show cause notice, is that the LNG received free of cost by the Appellant from the customers for regasification of LNG is a non-monetary consideration for provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld qualify as consideration for the services of regasification. The allowed loss and consumption would not represent a quid pro quo for the regasification services rendered by the Appellant. In fact, allowed loss and consumption is a stipulation contained in the Agreement between the parties to remit performance of the obligation of regasification in relation to the percentage of the LNG agreed upon as allowed loss and consumption . xxxxxxxxx 27. It can, therefore, safely be said that concept of allowed loss and consumption in the Agreement between the parties was to remit performance of the obligation and would not qualify as consideration for the services of regasification. 28. Learned Counsel for the Appellant, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received towards the taxable service, during or after provision of such services, implying thereby that where no amount is charged, it cannot be included in material/goods which are supplied by the service recipient. The Supreme Court also examined the scope of Explanation (c) to subsection (4) of section 67(1) of the Act and observed that it only provides for the modes of the payment of book adjustments and it does not expand the meaning of the term gross amount charged to enable the Department to ignore the contract value or the amount actually charged by the service provided to the service recipient for the service rendered. 32. In view of the aforesaid decision of the Supreme Court in Bhayana Builders, free of cost LNG supplied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period Eddie performs the services. 92. There is monetary consideration for Eddie's services ($100 per hour). The provision of the use of computer facilities, stationery and safety equipment and the transport, accommodation and meals is not part of the price paid for the as it is not a payment or of value to Eddie in return for his services. They are rather conditions of the contract that go to defining the supply made by Eddie, and are used in providing the services, rather than being supplied to Eddie in return for the services. They do not provide economic value to Eddie in return for his supply. The provision of these things in these circumstances is not consideration in connection with the supply by Eddie. There is no non-mone ..... X X X X Extracts X X X X X X X X Extracts X X X X
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