2018 (10) TMI 549 - AT - Service Tax

GTA Service - reverse charge mechanism - goods transport agency services for transportation of effluent generated in their factory during the period January, 2005 to September, 2008 - time limitation - Held that - Similar issue of transportation of effluent waste through pipeline or conduit, was being considered by the Tribunal as to whether taxable or otherwise, in the case of Gujarat State Fertilizers and Chemicals Ltd Vs CCE 2014 (7) TMI 893 - CESTAT AHMEDABAD , where it was held that the said services cannot be taxed under the head GTA Services - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellant is liable to pay service tax on transportation charges for effluent transport under reverse charge mechanism.
2. Whether transportation of effluent can be considered as transportation of goods for the purpose of service tax.

Analysis:

Issue 1: Liability to Pay Service Tax
The appellant engaged goods transport agency services for transporting effluent from their factory and paid transportation charges. Revenue Authorities contended that service tax is applicable under reverse charge mechanism. The appellant argued that effluent is not goods, thus not taxable. Both lower authorities held in favor of the Revenue. The appellant also contested the order on limitation, which was rejected.

Issue 2: Classification of Effluent as Goods
The Tribunal considered a similar issue in Gujarat State Fertilizers and Chemicals Ltd case, where it was held that transportation of effluent waste cannot be taxed under "GTA Services." The Tribunal analyzed the definition of "goods" under the Sale of Goods Act, 1930, and the Finance Act, 1994. It was established that movable property, which can be sold, constitutes goods. In this case, effluent is waste disposed of by the appellant, not purchased for a price. As the transportation services provided were not for goods as defined in the Sale of Goods Act, they were not considered services for transportation of goods under the Finance Act. The Tribunal applied this precedent to the present case, ruling in favor of the appellant.

In conclusion, the Tribunal found the impugned order unsustainable and set it aside, allowing the appeal of the appellant regarding the liability to pay service tax on transportation charges for effluent transport. The judgment highlighted the distinction between goods and waste, determining that effluent does not fall under the category of goods for the purpose of service tax.