2010 (10) TMI 334 - AT - Service Tax

Business Auxiliary Services - Treatment of liquid chemical effluents generated at various industries for a charge - Liable to service tax along with inetrest and penalties - Board vide circular F. No. 131/111/2007-CX.-4, dated 13-7-2007, had taken a view that incineration/shredding of bio-medical waste can by no stretch of imagination be called as processing of goods - It was also observed that the activity does not qualify to be called as provision of service on behalf of clients. Held that this circular was not considered by the original adjudicating authority - Therefore,the matter is required to be remanded to original adjudicating authority to consider the circular as well as the other decisions on the same issue and to pass a fresh order - Needless to say the appellants shall be given reasonable opportunity to present their case.

Summary

Issues:
1. Whether the service provided by the appellant is ancillary under Business Auxiliary Services and liable to service tax?
2. Applicability of previous judgments in similar cases.
3. Consideration of the circular issued by the Board regarding the nature of the activity.

Analysis:

1. The Appellate Tribunal considered the issue of whether the service provided by the appellant, involving the processing and treatment of liquid chemical effluents, falls under Business Auxiliary Services and is thus subject to service tax. The Revenue contended that the service provided by the appellant is ancillary and liable to service tax, resulting in a demand for service tax, interest, and penalties. The appellant argued citing a previous case and a Tribunal decision that similar activities were not covered under Business Auxiliary Services. The Tribunal, considering the previous decisions and a High Court ruling, granted an unconditional stay on the demand for service tax.

2. The Tribunal referred to the case of Bharuch Enviro Infrastructure Limited and the Tribunal's decision in the case of Vapi Waste & Effluent Management Company Limited to support the appellant's argument that the treatment of bio-medical waste incineration/shredding does not fall under Business Auxiliary Services. The Tribunal also noted a High Court decision in a similar case, providing additional support for granting an unconditional stay on the demand for service tax. These previous judgments played a crucial role in the Tribunal's decision to allow the stay petition.

3. Additionally, the Tribunal took note of a circular issued by the Board, dated 13-7-2007, which stated that incineration/shredding of bio-medical waste cannot be considered as processing of goods or provision of service on behalf of clients. The Tribunal observed that this circular was not considered by the original adjudicating authority. Therefore, the Tribunal deemed it necessary to remand the matter back to the original adjudicating authority to consider the circular and other relevant decisions on the issue. The appellants were to be given a reasonable opportunity to present their case in light of this circular and other pertinent considerations.

This detailed analysis of the judgment provides insights into the issues addressed by the Appellate Tribunal regarding the service tax liability of the appellant and the significance of previous judgments and circulars in reaching their decision.