By TIOL News Service

AHMEDABAD, SEPT 10, 2014: THE issue is whether the disposal facility provided by the appellant on some consideration to M/s Heavy Water Project Vadodara, for disposal of a waste effluent material through appellant's pipe line, can be considered as providing of services under 'Transportation of Goods through pipeline or conduit ' as per Section 65 (105)(zzz) of the Finance Act, 1994

Before the CESTAT, it is the submission of the appellant that the lower appellate authority has wrongly held that the term 'goods' has not been defined under the FA, 1994 or the STR, 1994. Inasmuch as Section 65(50) of the Finance Act, 1994 defines 'goods' for the purpose of Service Tax law as having been assigned the meaning as per Section 2(7) of the Sales of Goods Act, 1930. It is further submitted that effluent waste is not a movable property and is a hazardous waste and, therefore, cannot be treated as goods. Inter alia the decision in Tata Consultancy Services 2004-TIOL-87-SC-CT-LB is relied upon. It is also submitted that the demand is time barred in view of the correspondence exchanged between the appellant and the Department.

The definition of 'goods' in the Sale of Goods Act, 1930 is as follows:-

"(7) 'goods' means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be served before sale or under the contract of sale;"

The AR defended the order of the lower authorities and submitted that under the Service Tax law it is not necessary that an activity should be necessarily in relation to goods bought and sold in the market.

The Bench referred to the relevant entry under the FA, 1994, the definition of 'goods' under the Sale of Goods Act, 1930 and thereafter observed –

++ 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 for 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.

In fine, the appeal was allowed by setting aside the OIA.

(See 2014-TIOL-1729-CESTAT-AHM)