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TMI Blog2022 (5) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... es: i. Receipt of LNG cargo/ carriers at the Hazira port; ii. Unloading of LNG from the carriers and its receipt at Terminal's receipt point; iii. Storing the imported LNG in the cryogenic tanks; iv. Re-gasification of the LNG imported by the Customers into RLNG; and v. Delivery of RLNG to the Customers at the delivery point 3. M/s Shell has submitted that keeping in view the nature of transaction, it is imperative to understand the nature of Natural Gas. Natural gas is a naturally occurring hydrocarbon gas mixture consisting primarily of methane. Methane being the primary constituent of natural gas, it gives the gas a highly flammable nature and makes it violently reactive and explosive if it comes in contact with air (oxygen). Accordingly, for long distance transportation of natural gas through sea route, the gas is condensed into a liquid state at close to atmospheric pressure by cooling down the gas to very low temperatures (approx. minus 160 degrees celsius). Condensation of natural gas from gaseous to liquid state reduces the volume of gas by 600 times and thus, helps transport huge volume of natural gas by conversion of the same in liquid form. Upon receipt of L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: HP pumps installed at the Terminal is a submerged pump including motor in a suction pot filled with LNG directly coupled to the pump. These pumps are required to generate high pressure essential for transportation of liquid natural gas through the vaporizer unit and natural gas (in gaseous form) upto the Customer delivery point. vi. Vaporizer Unit: Vaporization is achieved either by ORV or SCV. Both systems are maintained at full operable conditions for use in re-gasification process to meet the gas nomination quantities from Customers and users. vii. ORV: The ORV is an exchanger which uses sea water as external heat source. LNG flows upwards through vertical panels of the tubes and is vaporized by thermal exchange with a falling film of sea water. viii. SCV: The SCV is composed of a warm water tank where a stainless steel tube bundle is submerged. The water of the tank is directly heated from a submerged combustion burner which uses natural gas for its operation. The LNG is vaporized by passing through the tubes bundle where heated water acts as the heat exchanger. SCV is only a standby mechanism for re-gasification of natural gas at the Terminal and for this reason only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of RLNG, each as more particularly described in this Agreement. LTCORA Charges shall mean the fee payable by User to Terminal Co pursuant to this Agreement, and shall be calculated in accordance with Clause 14. 14.PAYMENTS AND PAYMENT SECURITY 14.1 Payments by User a) User shall pay Terminal Co the LTCORA Charges, any Deficiency Payment as applicable in accordance with this Clause 14 and Use or Pay Amount as applicable in accordance with Clause 6.3. The LTCORA Charges in respect of any Day shall be the product of the actual quantity of RLNG delivered at the relevant Delivery Point(s) and the LTCORA Tariff in respect of such Day. b) The LTCORA Charges calculation in respect of a Billing Period shall be equal to the aggregate of the LTCORA Charges for each Day during a Billing Period... ...." 6. M/s Shell as consideration collects re-gasification charges from its Customers as per the terms mutually agreed between the parties to the agreement. The said re-gasification charges are computed by multiplying the actual quantity of RLNG delivered at the relevant delivery point(s) with the re-gasification tariff in respect of such day according to the Agreement. System Use G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (SUG) towards the pre-estimate of process losses during LTCOR Services. Notwithstanding above, for whatsoever reason, User shall not be responsible for any quantity of System Use Gas in excess of zero point six six percent (0.66%) of the actual discharged quantity of LNG by an LNG Carrier." 10. M/s Shell has submitted that it is also pertinent to note that the quantity of gas to be allocated towards the SUG varies from Customer to Customer as the same is negotiated depending on multiple factors such as duration of the agreement, frequency of consignments, daily denomination quantity of the Customer, etc. Further, SUG does not have any impact on the re-gasification tariff charged from the Customers. 11. M/s Shell further submits that it is relevant to note that any efficiency or inefficiency (on account of uncertain events such as unplanned maintenance) leading to higher losses as compared to the stipulated percentage of SUG, would be borne solely by M/s Shell at its own cost. 12. The invoice for the re-gasification charges is issued to the Customer at the time of delivery of RLNG at respective delivery points. The re-gasification charges are computed by multiplying the agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion charges computed on the basis of RLNG delivered and not charge any GST on the SUG since the same does not qualify as consideration for the purpose of the GST Laws. 17. M/s Shell submits that the SUG decided as per the agreement with the Customer is not includible in the value of supply of re-gasification services as the same is in nature of losses and does not, in any manner qualify as consideration for the purpose of the Central Goods and Service Tax Act, 2017 (CGST Act)/ Gujarat Goods and Service Tax Act, 2017 (GGST) (since the provisions of the CGST Act and the GGST Act are identical, the provisions of CGST Act are referred herein for ease of reference and the same may be read along for the purposes of GGST Act wherever applicable), for re-gasification services provided by M/s Shell to the Customers. Consequently, no GST is payable on the SUG stipulated under the Agreement with the Customers. In this regard, M/s Shell makes the following submissions. Valuation provisions under GST 18. M/s Shell has submitted that under the CGST Act, the levy of tax is on the event of supply, which is defined in Sec 7 of the Act. That the value of such supply is to be determined as per. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent issued by the supplier has been reversed by the recipient of the supply..... .. (4) Where the value of the supply of goods or services or both cannot be determined under sub-section (1), the same shall be determined in such manner as may be prescribed...." 18.1 That as per S. 15, the value of supply shall be the transaction value, which is the price paid for the supply inter alia where price is the sole consideration. In other cases, i.e. in cases where price is not the sole consideration, then, the value shall be determined as per the valuation provisions contained in Chapter IV (Rules 27-35) of the Central Good and Service Tax Rules, 2017 ("CGST Rules"). 18.2 As per Rule 27 of the CGST Rules, where the consideration is not wholly in money, the value of the supply shall be the open market value of such supply, However, if the open market value is not available, the value shall be the sum total of monetary and value of non-monetary consideration, if such amount is known at the time of supply. 18.3 That further, if the value of supply is not determinable as per the open market value method or the sum total of consideration, the value of supply shall be the value of like s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon to arrive at the industry practice and standards. The findings of the report are as follows: i. System use gas is understood to mean losses of the gas in the system. This could be due to flaring of the gas, leakages, maintenance, accidents, purging requirement, measuring errors at inlet and outlet of the terminal and other reasons. The losses could be due to either of or combination of these factors [Definitions and abbreviations - page 4 of the report] ii. Measurement uncertainties can occur while measuring volume and calorific value of LNG unloaded at the terminal and volume of send out LNG and its calorific value measurements [Point 7.2 on page 9 of the report] iii. There is variation in the SUG expressed as a percentage of dispatched gas which is largely on account of factors such as load variation, capacity use, management of high load out, malfunctions and other operations [Point 9 on page 13 of the report] iv. For M/s Shell's Terminal, the report determines a conservative statistical estimate of SUG losses to be 1.22 percent which is the sum of average of other losses of 0.19 percent and measurement uncertainties of 1.03 percent [Point 6.6 on page 2 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny specific service provided by the service provider. That the same does not partake the character of consideration in the hands of the service provider, at any time whatsoever. 23. M/s Shell has submitted that it is relevant to note the fact that SUG is an internationally recognised concept was also relied upon in the case of Petronet (supra) and was accepted by the Ld. Tribunal. Thus, the SUG stipulated in the Agreement between the parties in the present case does not qualify as consideration for the re-gasification services provided by M/s Shell to its Customers. A. Process loss has been excluded from the value of supply by the Courts in the erstwhile regime 24. M/s Shell submits that the issue stands settled in favour of M/s Shell under the erstwhile regime, the Courts have affirmed the view that process loss pre-agreed by the parties does not form a part of the consideration/ the value of supply. 25. In this regard, M/s Shell has placed reliance on the decision of the Tribunal in the case of Petronet LNG Ltd. v. Pr. Commr. of ST, Delhi-I, 2019-VIL-659-CESTAT-DEL-ST, wherein the Tribunal, on similar facts, had held that SUG agreed between the parties does not constitute con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as consideration for service and thus, the SUG agreed between M/s Shell and its Customers in the present case will not qualify as consideration for the purpose of the CGST Act. 28. M/s Shell has submitted that the Tribunal's decision in the case of Petronet (supra) is a favourable ruling under the pre-GST Laws holding that SUG does not qualify as consideration for re-gasification services. That GST Laws and Service Tax Laws are in pari-materia and the concept of SUG is also same under both the tax regimes and accordingly, considerable weightage should be given to the aforesaid decision while pronouncing the ruling in the instant case 29. M/s Shell cited case of M/s Hipolin Ltd. v. CCE Ahmedabad 2012 (26) S.T.R. 191 (Tri. - Ahmd.), the Tribunal held that keeping in view the process of manufacture, some process loss is inevitable and in the absence of any evidence to the contrary, the contention that the said shortage/damages relates to the process loss has to be accepted and accordingly, duty demanded on the process loss is unsustainable. 30. In Kirloskar Oil Engines Ltd. vs. Commissioner of Central Excise, Nashik 2017 (349) ELT 299 (Tri.-Bom), the appellant sent raw materials i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court observed that consistency is the cornerstone of the administration of justice. It is consistency which creates confidence in the system and this consistency can never be achieved without respect to the rule of finality. With a view to achieve consistency in judicial pronouncements, the courts have evolved the rule of precedents, principle of stare decisis, etc. 36. M/s Shell further submits that since GST is still in its nascent stage, judgments rendered in the previous regime should be referred and relied upon for interpreting the GST Law provisions since the concepts under GST are similar in erstwhile laws. 37. M/s Shell submits that SUG cannot be considered as consideration for the re-gasification service provided by M/s Shell to its Customers. 38. M/s Shell submits that the SUG agreed between them and the Customers does not qualify as consideration for the re-gasification services provided by them and thus, the same does not form a part of the value of taxable supply in the present case. 39. M/s Shell further submits that before elaborating on the aspect of how SUG does not qualify as consideration, it analyses the provisions which govern the determination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uare Leisure Pvt. Ltd. 2019 (24) GSTL 125 (A.A.R. - GST), the Maharashtra Advance Ruling Authority explained the scope of the term "consideration" as follows: "The definition of consideration is inclusive and the consideration may be in cash or kind. The payment received will not be treated as consideration, if there is no direct link between the payment and supply. From the close scrutiny of above definition it is clear that there should be a close nexus between the payment and supply and thus any payment/exchange/barter etc. would be treated as consideration for supply and liable to GST." 42.2 Further it is submitted by M/s Shell that, it has been consistently held by the Courts that only the amount that has nexus with the activity can be taxed under the taxation laws. In the case of Baroda Electric Meters Limited vs Collector of Central Excise [1997 (94) ELT 13 (SC)], the Apex Court has held for the levy of tax, assessable value has to be linked to the taxable activity. As per the Court, any and every amount earned by the assessee would not be exigible to tax, but such amount has to be received in relation to the taxable activity performed. 42.3 Further it is submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration should have a nexus with the said supply of goods or service or both. 43. M/s Shell submits that the SUG does not qualify as consideration for the re-gasification services provided by M/s Shell to its Customers since the same is not in respect of, in response to, or for the inducement of supply. In other words, the SUG has no nexus with the services provided inasmuch as the SUG is stipulated in the contract between the parties to limit the risk associated with process loss and is not agreed as a consideration for the re-gasification service. 44. M/s Shell submits nature of the product dealt with in the present case: i. Natural gas is a naturally occurring hydrocarbon gas mixture consisting primarily of methane. Methane being highly flammable, makes the gas reactive if exposed with air (oxygen). ii. For transportation of natural gas over long distances, natural gas is condensed into a liquid state at close to atmospheric pressure by cooling down the gas to very low temperatures (minus 160 degrees). iii. Condensation of natural gas from gaseous to liquid state reduces the volume of gas by 600 times. iv. Upon receipt of LNG at the destination port, natural gas in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trochemicals Limited vs Commissioner of Customs, Mangalore [TS-724-SC2015], wherein it was held that customs duty should be assessed on the actual quantity unloaded on the shores of India and not the bill of lading quantity and due regard has to be given to the loss of goods during transportation. ii. During unloading of the LNG from LNG carrier, Terminal tank pressure increases due to vaporization of unloaded LNG. Pressure in the tanks is managed through Boil off Gas compressors and supply of Boil off Gas to LNG carrier tanks. In case of receipt of LNG from a carrier with higher liquid temperature or tank pressure, Terminal tank pressure rises sharply and the gas is vented out automatically to control tank pressure. Such gas flared in the atmosphere is gas lost. iii. For the unloading of LNG from the LNG carriers to the storage tanks at the Terminal, unloading arms are connected to the discharge point on the vessel. It may be noted that the connectors at discharge point on the vessel as well as the unloading arms are made of specialized metal. At the time of disconnecting the unloading arm from the vessel, due to the friction between the metal surfaces, there is high risk of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of LNG are prone to inaccuracies due to technical limitations in the measurement of LNG. It is relevant to note that even though the meter installed at the Terminal are state of the art and based on the most efficient and accurate technology present in the re-gasification industry, even the latest technology has not been successful in providing 100 percent accurate results. As a result, there are always uncertainties and inaccuracies in measurement of LNG done during the process of re-gasification. 47. M/s Shell has submitted that the existence of the potential process losses is also recognized by the OISD (Oil Industry Safety Directorate) Standard 194, Edition 2016, issued by the Government of India, Ministry of Petroleum and Natural Gas, on the safety and design aspects of all the major components of an LNG receiving terminal facility including unloading, storage and re-gasification of LNG. Some aspects emerging from this report are: Calorific/ energy values of LNG are provided in a range due to uncertainty of LNG measurement Leaks and spills of LNG are inherent in the product and its handling Relief mechanisms in the form of flare/ release of gas to atmosphere are nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mise and abide by the same. This has also been included in the GST laws since as per the CGST Act, consideration includes any payment in money or otherwise whether by the recipient or any other person for inducement of supply. 54. M/s Shell submit that they and the Customers have negotiated and mutually agreed a fixed per unit charge to be paid for the services of re-gasification rendered under the Service Agreement. The parties have arrived at the re-gasification tariff in such a manner so that it acts as a motive for M/s Shell to enter into the Agreement and render the re-gasification services. That SUG does not form a part of the consideration since regardless of the SUG, the regasification tariff remains the same, which is motive for M/s Shell. That the change in percentage of SUG does not influence the consideration agreed for the provision of regasification services. 55. M/s Shell submitted that the contracting parties have mutually consented only on the regasification charges as the consideration under the Service Agreement and accordingly, SUG is not in the nature of consideration decided between the parties for inducement of the supply of services. 56. M/s Shell submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intend to treat the same as consideration mutually and the Department has to give effect to the term of the contract between the parties. Reliance in this regard is placed on a decision of a three-judge bench of the Hon'ble Supreme Court in the case of Commissioner of Income Tax v. Motor & General Stores Pvt. Ltd. (1967) 66 ITR 692 (SC) wherein it was declared that the tax department cannot discard the clear terms of the agreement between the parties to determine the purported intent. 59. M/s Shell submits that in the present case, the consideration for re-gasification services has been identified in the agreement as re-gasification tariff, the quantum of which has been mutually agreed between the contracting parties. Further, both the parties, i.e. M/s Shell and the Customers have accepted the possibility of losses during the process of re-gasification of LNG to RLNG and the challenges faced in the measurement of the product i.e. natural gas. With this understanding, both the parties have mutually set aside a pre-defined portion of the gas to account for such losses incurred during the re-gasification process and term the same as SUG. The percentage of SUG mentioned in the agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntingency of emergence of iron ore fines having some value, is not determinable at the time of fixing of crushing charges. Relevant part of the decision is extracted below: "The ground loss also is pre-fixed. Now, at the time of issue of work order neither party is aware of the exact quantum of loss or possible accrual of iron ore fines for the appellant. In other words, the contingency of emergence of iron ore fines having some value, is not determinable at the time of fixing of crushing charges. Hence, it is not tenable to hold that the crushing charges are influenced by the possible emergence of iron ore fines and its additional value to the appellant." 63.1 The aforesaid decision has also been affirmed by the Apex Court and reported at Commissioner v. Godawari Power & Ispat Ltd. - 2018 (10) G.S.T.L. J168 (S.C.). 64. M/s Shell submits that in the instant case, the SUG is agreed only as an estimation of loss of gas in the process of re-gasification. Actual losses may be higher or lower than the estimate of process loss i.e. SUG. 65. M/s Shell submits that the re-gasification tariffs which is the sole consideration agreed with the Customer under the Service Agreement are comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Ruling GSTR 2001/6 held that a payment is not limited to a payment of money and it includes a payment in a non-monetary or in an in kind form, such as: providing goods; granting a right or performing a service (an act); and entering into an obligation, for example to refrain from selling a particular product (a forbearance). 71. That consideration for supply can also be in kind. However, it is relevant to note that nonmonetary consideration should also meet the requirements of consideration, viz, the same should be nexus with the supply, the consideration should be for the inducement of supply and there should be consensus ad idem to treat it as consideration by the parties to the contract. 72. M/s Shell submits that in the instant case, SUG is stipulated in the Agreement towards process loss and not as a consideration for the supply of re-gasification service. The provision of gas as SUG towards possible losses in the re-gasification process is a practice followed by the entire re-gasification industry both internationally as well as domestically. Further, in the terms of the Agreement also sufficiently clarify that SUG is allocated only towards process loss and not as a con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny supply. v. SUG is not a subsidy. 76. That SUG is not liable to be included in the value of supply of the re-gasification service provided by M/s Shell to the Customers. 77. M/s Shell submits that SUG agreed between it and the Customers does not qualify as consideration under the CGST Act and thus, the same is not liable to be included in the value of supply of re-gasification services by M/s Shell to the Customers. Question on which Advance Ruling sought 78. Whether value attributable to SUG stipulated in the Agreement between the Applicant and Customers is subject to the levy of GST and therefore, liable to be included in the consideration for re-gasification services determined as per Section15 of the CGST Act? Personal Hearing 79. Personal hearing granted on 18-2-22 was attended by Ms. Priyanka Rathi, Advocate and Shri Abhishek Nolkha and they reiterated the submissions. On enquiry regarding the levy of Service Tax on said SUG during pre- GST era, Ms. Rathi informed that a Show Cause Notice was issued on the identical issue in Service Tax proposing to demand Service Tax on SUG gas and that M/s Shell availed SVLDRS by paying the service tax computed amount as per the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by cross referencing with M/s Shells customers if the goods(SUG) as cited by M/s Shell are lost as process loss; since LNG being non GST item, the customers( who are the principal) cannot avail ITC under the GST scheme of law on its LNG in toto, therefore reversal of ITC on process loss concept does not arise at all in this case and thereby the checks and balances framed in GST scheme of law for process loss cannot be verified in this case. 85. Though this is not the matter before us, we do note that as Shells customers are not paying the value portion on the SUG invoices, but paying only the tax amounts, the customers cannot avail ITC on the tax portion reflected in the Shell's SUG invoices as per 2nd Provisio to Section 16(2) CGST Act, its customers have not paid the value portion of SUG invoices. 86. We have read the contract entered by M/s Shell with M/s GAIL (India) Pvt. Ltd. for regasification of its customers LNG. When inquired for the practise of M/s Shell in pre- GST era and whether service tax was paid on the value received for System use gas, M/s Shell submitted that in this regard in service tax era, a Show cause Notice was issued by the Department on M/s Shell (form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther paid service tax amount for tax proposed in both the later two SCNs as per provision of SVLDRS. 89. We note that from the period July 2010 to June 2017, a total Service Tax demand of Rs. 75,07,40,691/- ( Rupees Seventy Five Crores Seven Lacs Forty Thousand Six Hundred Ninty One Only.) was made on M/s Shell on SUG value vide said 3 SCNs and that M/s Shell paid the SVLDRS computed amounts and thereby availed the benefit of SVLDRS, such as waiver of interest and penalty and immunity from prosecution. 90. Further, we agree with M/s Shell submission at paragraph 28 to the extent that the concept of SUG is same under both the tax regimes of Service Tax and GST. 91. On careful study of M/s Shell's submissions, We find that M/s Shell has submitted that the subject Gas (termed by M/s Shell as SUG) is consumed/ used by it for the following purposes,: i. Gas is used for controlling the Terminal Tank pressure, by way of gas being vented out automatically by flaring in the atmosphere. During unloading of the LNG from LNG carrier, Terminal tank pressure increases due to vaporization of unloaded LNG. Pressure in the tanks is managed through Boil off Gas compressors and supply of Boil of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or service tax taxability on SUG. Exercising the provisions of Section 105 of the CGST Act, We hold that the Statement of M/s Shells conversant personnel recorded under section 14 Central Excise Act to investigate the taxability on SUG has its bearings on the issue at hand before us. We further hold that Statements recorded under Section 14 of the Central Excise Act, 1944 read with Section 83 of Finance Act, 1994 by the Revenue are admissible in the Court of law. We are of strong opinion that the recordings of M/s Shell (formerly known as Hazira LNG Pvt. Ltd.) personnel namely Shri Sanjay Kshatriya, Terminal Manager And Shri Nitin Shukla, Managing Director are relevant to this subject matter, as the issue pertains to 'concept of SUG'; We place on record of this Ruling the following facts: i. M/s Shell re-gasifies its own LNG ii. Also, M/s Shell also re-gasifies LNG belonging to its customers. The re-gasification services covers the services related to re-gasification of LNG into RLNG on behalf of M/s Shells customers including allied, incidental and ancillary services such as receipt of LNG Carriers at the Port, unloading of LNG from LNG carriers and receipt by Shell of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or maintenance as specified and had M/s Shell purchased this gas used for these procedures then it would have added this the cost of purchase into cost of provision of re-gasification service. C. 'System Use Gas' Measurement Inaccuracies. We note that Inaccuracies in measurement of gas may lead not only to losses but even gains, and it can't be predetermined. Therefore, the Quantum of M/s Shell's said System use gas percentage cannot be a fixed quantity or a fixed percentage. Shri Sanjay Kshatriya in his statement recorded under section 14 Central excise Act, stated ( as reflected in page 11 of cited SCN dated 29-9-15 this Relied upon document is available with M/s Shell) that gas lost/ gained, in measurements, cannot be determined in isolation and no separate records for individual losses are maintained. Further, that use of gas depends on contingencies and cannot be ascertained and fixed at various stages; and that Shell maintains records of LNG/ RLNG used to run GTG and SCV but no separate records for individual losses are maintained. Further, no separate records of Total gas used as fuel by Shell's LNG re-gasified and Shells customers LNG re-gasified is maintained. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by M/s Shell for the Re-gasification scope of service to be supplied to its customers and as M/s Shell is not purchasing gas from market but made an agreement with customer for a SUG quantity to be provided to customers for the subject service supply, we find this SUG quantity to be provided by its customers is now translated into SUG value by M/s Shell invoices raised on its customers. 96. Thus we find that the phrase 'system use gas', has satisfied its plain meaning as it is a gas used for in said system for the Re-gasification service supply and thereby M/s Shells invoice reflecting the SUG value is a part and parcel of the Re-gasification service supply charges. It is on record that SUG has nexus with this re-gasification service supply and is a cost, both direct and also incidental & ancillary to the scope of re-gasification services. 96.1 The taxable supply value, as per Section 15 of CGST Act, 2017 reads as follows: 15. Value of Taxable Supply. (1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCNs (an indirect tax) and now GST(an indirect tax) before us. 98. We note that M/s Shell has cited case laws pertaining to Process loss. Now, it is on record that Gas, in our present case, has neither evaporated but that it is used for certain activities, either for running the re-gasification equipment or used for safety procedures by venting; and used for maintenance procedures. Further, SUG may also be retained free of cost in cases where uncertainties in measurement is negative as discussed at para 93 (C). Thus the case laws cited by M/s Shell are different in its facts. When we read the agreement of Shell with its customers, the way the agreement was drafted gives an impression that its process loss and thereby We hold that facts of consumption/ utlisation of Gas in subject supply has been covered up; however with facts We brought on record vide our discussion, the true picture of gas being used has been brought to light regarding the nature of system use gas and its nexus with supply of regasification service( which has a wide scope and not limited to just re-gasification of LNG into RLNG as detailed at paragraph 2). Thus it is on record that the SUG value has direct nexus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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