2023 (3) TMI 239 - AT - Service Tax

Levy of Service Tax - remuneration collected from the member units for the activity of treatment of effluent water - N/N. 08/2017-S.T. dated 20.02.2017 - HELD THAT - The said activity has been exempted from the levy of Service Tax vide Notification No. 08/2017-S.T. dated 20.02.2017 - Since the activity is exempt from the levy of Service Tax as per the above Notification, there are no hesitation to hold that the demand cannot sustain and requires to be set aside. The impugned order is set aside - appeal allowed.

Summary

Issues involved: Determination of liability to pay Service Tax on remuneration collected for treatment of effluent water.

Comprehensive details of the judgment:

1. Facts of the case: The appellant company, registered under the Companies Act, 1956, treated effluents discharged from member units and collected fixed and variable costs along with emergency fund contributions.

2. Departmental view: The Department considered the activity as falling under the definition of "service" u/s 65B(44) of the Finance Act, 1994, and issued a Show Cause Notice for non-registration and non-payment of Service Tax.

3. Original Authority's decision: The Original Authority confirmed the demand of Service Tax, interest, and penalties for the period in question, leading the appellant to appeal before the Tribunal.

4. Appellant's arguments: The appellant, a non-profit organization treating effluent water for 14 member units, contended that the activity was exempt under Notification No. 08/2017-S.T. for the relevant period.

5. Respondent's stance: The Respondent supported the findings of the impugned order.

6. Issue for decision: The Tribunal was tasked with determining whether the appellant was liable to pay Service Tax on the remuneration collected for effluent water treatment.

7. Exemption under Notification: The Tribunal referred to Notification No. 08/2017-S.T., which exempted the service by operators of Common Effluent Treatment Plant from Service Tax for the specified period.

8. Tribunal's decision: Considering the exemption under the Notification, the Tribunal held that the demand for Service Tax could not be sustained and set aside the impugned order, thereby allowing the appeal with consequential reliefs.

Conclusion: The Tribunal ruled in favor of the appellant, citing the exemption under Notification No. 08/2017-S.T., and set aside the demand for Service Tax, providing consequential reliefs as applicable.