2014 (7) TMI 893 - AT - Service Tax

Demand of service tax - Transportation of effluent through pipeline or conduit - Whether appellant is liable to payment of Service Tax on the services of transportation of effluent through pipeline or conduit to M/s Heavy Water Project (HWP) on some consideration under Section 65(105)(zzz) - Held that - As per definition of goods given in Section 65 (50) of the Finance Act, 1994 the meaning of goods for the purpose of Service Tax law has to be as assigned in Clause (7) of Section 2 of the Sales of Goods Act 1930. As per the provisions of Section 2(7) of Sales of Goods Act 1930 the goods has to be a category of movable property . Movable property in general trade parlance is considered as a property in goods which can fetch certain price. In the present facts and circumstances of the case the effluent discharge facility is for disposal of a waste which is not being purchased by any person but is only being disposed of by utilizing the services of the appellant. As the relevant facilities/services of transportation provided by appellant are not the goods as defined in Section 2(7) of the Sales of Goods Act 1930, the same cannot be considered as a service provided for transportation of goods as per Section 65 (105)(zzz) of the Finance Act, 1994 read with Section 2(7) of Sales of Goods Act 1930 - Decided in favour of assessee.

Summary

Issues involved:
Whether the appellant is liable to pay Service Tax on transportation of effluent through pipeline under Section 65(105)(zzz) of the Finance Act, 1994.

Analysis:

Issue 1: Definition of 'goods' under the Finance Act, 1994
The appellant argued that 'goods' should be interpreted as per Section 2(7) of the Sales of Goods Act 1930. They contended that effluent waste is not movable property and cannot be considered goods. The appellant cited relevant case laws to support their argument. Additionally, they claimed that the demand was time-barred based on correspondence with the Department.

Issue 2: Interpretation of Service Tax law
The Revenue argued that under Service Tax law, an activity need not be related to goods bought and sold in the market. The lower authorities' orders were defended by the Revenue.

Issue 3: Classification of service under Section 65(105)(zzz) of the Finance Act, 1994
The Tribunal analyzed whether the disposal facility provided by the appellant for effluent disposal could be considered as providing services under 'Transportation of Goods through pipeline or conduit' as per Section 65(105)(zzz) of the Finance Act, 1994. The Tribunal referred to the definition of 'goods' in the Sales of Goods Act 1930 and concluded that the effluent disposal service did not fall under the definition of 'goods' as per the Act. Therefore, the service provided could not be considered as transportation of goods under the relevant section.

Conclusion:
The Tribunal allowed the appeal filed by the appellant, setting aside the order passed by the first appellate authority. The decision was based on the interpretation of 'goods' under the Sales of Goods Act 1930 and the inapplicability of the service provided by the appellant to the definition of 'goods' for the purpose of Service Tax law.