9911796707
TMI Blog2025 (3) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned ruling dated 11.5.2022, is set aside and the matter is remanded back to the Authority for Advance Ruling (i.e. the GAAR) for a fresh decision. X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the appellant are not paying the value mentioned in the invoices but are only paying the GST involved; * three SCNs came to be issued for the period 07/2010 to 6/2017, demanding Service Tax during the legacy period on the SUG and the appellant opted for SVLDRS [Sabka Vishwas Legacy Dispute Resolution Scheme] in respect of all the three SCNs; * that the concept of SUG is same under both the tax regimes - legacy and GST; * that gas is used by the appellant during the process of SCV; that SUG prima facie is not a loss but the gas is being used in the plant for the smooth flow of regasification service supply; that SUG amount has nexus with regasification service supply; * that in terms of section 105, ibid, statements recorded by DGCEI of the appellant's personnel can be relied wherein it is stated that gas is required during re-gasification process; that during shutdown/breakdown/ power failure RLNG is lost; that during unloading gas is used; that gas is also used during planned maintenance of the system; * that had the appellant purchased gas for these procedures, it would have added to the cost of purchase towards provision of service; * that further the uncerta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use the ORV method which is not dependent upon power; that rarely SCV method is used for regasification; * GAAR failed to appreciate that the use of SUG is only incidental & not intended qualify as consideration; * that the impugned ruling is silent on process loss in trade parlance; * that SUG is an internationally recognised concept which is an estimation of gas lost during the process of regasification; that allocation of gas towards loss is an internationally recognised concept for limiting the risk associated with process loss; * that they have relied on two experts report which cannot be discarded without reason; * that reliance placed on the SCN issued for demand of Service Tax is irrelevant and unwarranted; * that in the legacy regime process loss was not subject to tax; * that SUG is nothing but LNG & is therefore outside the purview of GST; * that GAAR failed to appreciate the two judgements in the case of Petronet LNG Ltd 2019-VIL-659-CESTAT Del-ST & 2021-VIL-118-CESTAT-ST; * SUG does not qualify as consideration under GST; that in order to qualify as consideration it should be [i] monetary or non-monetary [ii] received in respect or inducement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted additional written submissions dated 4.1.2025, raising the following averments viz * that the emphasis laid on the use of SUG is totally irrelevant as they use the ORV technology; that SCV technology is used only in exceptional cases and under normal operation it is in standby; * that ORV does not use SUG and instead uses sea water as heating medium; that the primary source of power to run the GTG is the electricity supplied by the State Electricity Grid; * that loss of gas during various stages of the regasification process is owing to the following reasons: * inherent losses on account of the nature of LNG and RLNG; * losses in the system during the process of unloading, storage and regasification of natural gas; * inaccuracies or uncertainties in the measurement of losses as well as natural gas in the system while undertaking the above processes; * use of the gas during certain exigencies and as an exception in running equipment such as Gas Turbine Generator (GTG) and Submerged Combustion Vaporizer (SCV). * that the contract is to provide LTCOR1 services; * that the purpose of SUG is in the nature of remission to avoid situations triggering impositi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (16) Review /GST/South /CESTAT /Petronet/23/2019-20/2310 dt. 03.03.2021 by Review Branch) has accepted the above decision mentioned in the OIO No. 14/Refund/MC/Div-CP/221-22 dated 25.01.2022 in the case of M/s Petronet LNG Ltd.; * that the concept of SUG is the same under the regime of service tax and GST, is same; * that unless the contract states that the SUG made available to the Appellant is intended by the Parties for the inducement of regasification services, it cannot qualify as a Consideration. * that not a single clause exists which indicates that it was the intention of the parties; * that the concept of SUG is nothing but a remission, which is not the same as a consideration; * an amount equivalent to 0.66% has been carved out as a remission and accordingly, it is not required to be redelivered by the Appellant; that in substance SUG is nothing but a remission of an obligation under the Contract expressly agreed to between the parties as per principles set out under Section 63 of the Indian Contract Act, 1872; * that once SUG does not qualify as a consideration, it cannot form part of the value on which GST can be charged; * The Ld. Authority has failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall include- (a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier; (b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both; (c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services; (d) interest or late fee or penalty for delayed payment of any consideration for any supply; and (e) subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments. Explanation.-For the purposes of this sub-section, the amount of subsidy shall be included in the value of supply of the supplier who rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Natural Gas. In the Submerged Combustion Vaporizer, a stainless-steel tube bundle is submerged in a bath of warm water. In this vaporizer, heat generated by burning fuel gas is used to warm the water which in turn vaporizes LNG. Bath water is heated by the use of flue gases created from the combustion of Low Pressure Fuel Gas in a Combustion Chamber. SCV operation is intermittent and used on need basis. Under normal operation it is in standby, because primary equipment as vaporizer is Open Rack Vaporizer (ORV) which uses sea water as heating medium. 14. The table supra, depicts the following viz [i] the actual process loss [column no. 6] as a component out of the SUG, is very meagre/insignificant; [ii] the data depicted in column 5 reveals the quantum utilized by the appellant towards re-gasification; [iii] the data depicted in column 7 reveals that a considerable portion of the SUG was retained by the appellant which was subsequently sold. 15. The aforementioned data has been provided now for the first time, meaning thereby that the GAAR while arriving at their impugned ruling, which is in appeal before us, did not have the benefit of examining this data. To that extent ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
