2023 (8) TMI 122 - AT - Service Tax

Classification of services - Goods Transport Agency Service (GTA) or not - transportation of effluent generated during effluent treatment of the appellant - HELD THAT - The facts in the present case is not under dispute that the goods which were transported for the appellant is effluent and the same is transported for throwing the same and the same is not sold or saleable in the market. As per definition in the Finance Act, 1994, the definition of goods as provided under Section 65(50) goods has the meaning assigned to it in clause (7) of section 2 of the Sale of Goods Act, 1930 - As per the combined reading of both the definitions, it is clear that only for such transportation which is for transport of goods defined under Section 65(50), will be covered under the service of Goods Transport Agency. In the present case, the transport of goods is in respect of effluent which is neither sold nor saleable in the market therefore, the same is not qualify as goods defined under Section 65(50). Accordingly, the transportation of effluent will not fall under the Goods Transport Agency service. In the case of M/S GUJARAT STATE FERTILIZERS CHEMICALS LTD. VERSUS CCE VADODARA 2014 (7) TMI 893 - CESTAT AHMEDABAD the Tribunal held that As the relevant facilities/services of transportation provided by appellant are not for the goods as defined in Section 2(7) of the Sale 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 Sale of Goods Act, 1930. Thus, it is settled that the goods for the purpose of Goods Transport Agency service should be qualified as goods‟ in terms of definition given under Section 65(50) of Finance Act, 1994. Therefore, in the present case the goods being effluent which is neither sold nor saleable, does not qualify in terms goods . Therefore, transportation of the same does not fall under the four corners of Goods Transport Agency service, hence the same is not liable to service tax - appeal allowed.

Summary

Issues involved:
The judgment addresses the issue of whether the transportation of effluent generated during effluent treatment is liable to service tax under Goods Transport Agency Service.

Summary:

Issue 1: Transportation of effluent under Goods Transport Agency Service
The appellant argued that since the effluent is neither sold nor saleable, it does not qualify as goods under the Service Tax law. They cited various decisions in support of their argument. The Tribunal examined the definitions of "goods" and "Goods Transport Agency" under the Finance Act, 1994. It was concluded that transportation of effluent, which is not sold or saleable, does not fall under Goods Transport Agency service as it does not meet the criteria of being classified as goods. The Tribunal referred to previous judgments to support this conclusion.

Judgment 1:
The Tribunal allowed the appeal, setting aside the impugned order and ruling that transportation of effluent, which is not sold or saleable, does not qualify as goods under Goods Transport Agency service, and thus is not liable to service tax.

Separate Judgment by Gujarat State Fertilizers & Chemicals Limited:
In the Gujarat State Fertilizers & Chemicals Limited case, the issue was whether the transportation of effluent through a pipeline to a project was liable to service tax. The Tribunal held that effluent waste is not movable property and cannot be considered as goods under the Sale of Goods Act, 1930. The Tribunal referred to various case laws to support this decision. It was further noted that the disposal of waste effluent does not qualify as providing transportation services for goods under the Finance Act, 1994. The Tribunal allowed the appeal, setting aside the demand for service tax.

Separate Judgment by Effluent Channel Project Limited:
In the Effluent Channel Project Limited case, the Tribunal considered whether the transportation of industrial effluent can be taxed under the category of "Transportation of Goods other than Water through pipeline or other conduit service." The Tribunal referenced a previous decision in favor of the appellant and noted that industrial effluent cannot be treated as goods. The demand for service tax was set aside, and the appeal was allowed based on the previous Tribunal decision.

Separate Judgment by Odyssey Organics P. Limited:
In the Odyssey Organics P. Limited case, the issue was regarding the demand of service tax for processing disposable waste water. The Tribunal held that treating industrial waste does not amount to processing goods for a client. The Tribunal referred to specific case laws and circulars to support this decision. It was concluded that treatment of effluent waste cannot be considered as processing goods, and the impugned order was set aside, allowing the appeal.