Effluent Neither  Sold Not Saleable not Qualify as Goods under GTA Service, not liable to Service Tax: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the effluent is neither sold nor saleable nor qualifies as goods under  Goods Transport Agency Service (GTA) and is not liable to service tax.

Panoli Enviro Technology Limited , the appellant questioned whether the transportation of effluent generated during the effluent treatment of the appellant is liable to service tax under Goods Transport Agency Service (GTA) under Section 65(105)(zip) read with Section 68 of Finance Act, 1994 read with Notification No. 36/2004-ST dated 31.12.2004 read with Rule 3(d)(v) of Service Tax Rules, 1994.

Shri Mrugesh G. Pandya, Counsel appeared on behalf of the appellant submitted that the transportation of effluent is involved, which is neither sold nor saleable in the market therefore, the transportation of goods which is other than goods defined in the Sale of Goods Act, cannot be taxed under Goods Transport Agency service. 

Shri Rajesh K Agarwal, Superintendent (AR) appearing on behalf of the Revenue reiterated the findings of the impugned order.

It was observed that the goods which were transported for the appellant are effluent and the same is transported for throwing the same and the same is not sold or saleable in the market.  As per the 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 (3 of 1930)”. 

Further viewed that 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. 

The two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) held that “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.”

The CESTAT set aside the impugned order and allowed the appeal. 

To Read the full text of the Order CLICK HERE

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