Was this territory where Separatist forces were based or operating?

Not to my knowledge; but then again, whatever the case, the Ukrainian government would claim it was, wouldn't it.

If so then they were in the wrong for using this territory as a strategic base.

They're still Ukrainian citizens, and the Ukrainian armed forces shelling Russian territory and killing a Russian governmental employee is a casus belli without any question or doubt regardless of circumstances on their side of the border.

If you mean shelling then yeah both sides have fucked up in that regards.

Loving this victim-blaming of yours. The Ukrainian military arrived at Donbass, shelled multiple cities repeatedly, performed aerial assaults upon targets with no apparent military value, but then you're going to blame the militia for fighting back.

You can't just say that only ethnic Russians are being massacred.

You don't need that restriction to have a casus belli. Russian citizens and ethnic Russians are being slaughtered, and this is a perfectly valid reason to go to war.

Let's go with an example: the ISIS burned one Jordanian citizen alive, yet that was reason enough for Jordan to join the bombardment campaign.

When you find Russian weapons/ tanks/ systems/ troops in the separatist army

I'd be hard-pressed to find any weapons in the Ukrainian army that are not Russian-made, what now? The claims of Russian Army units fighting the war in the Eastern Ukraine are moronic and substantiated by the Ukrainian President holding up the Russian citizen passports which the Russian army personnel do not even have at hand when serving their term. Still, when country A claims it is fighting a war against country B, it is a perfectly valid casus belli for the latter to actually enter the war.

Ukraine was never part of the Soviet Union after the revolution.

Haha, you better tell that "never" to everyone who's ever lived in the Ukrainian Soviet Socialist Republic.

Ukraine declared it's Independence and the soviets had to go in and invade ti gain that territory.

Hahaha, that's a good one. What exactly makes the Ukrainian People's Republic with its openly puppet regime that held hardly any support from the people any more representative of the will of the people in your eyes than the Donetsk–Krivoy Rog Soviet Republic and the Odessa Soviet Republic? Especially given that the latter two occupied a much greater share of the territory of the modern-day Ukraine, and held a higher share of the population? Hilariously, these were also the "Soviets" that united Ukraine under the red banner; the USSR did not even exist at that moment.