By TIOL News Service

MUMBAI, OCT 17, 2016: THE issue is regarding the demand of service tax from the appellant under the category of Business Auxiliary services for the period 2006-07.

Both the lower authorities have held that the activity of the appellant in processing disposable wastewater (industrial waste) received from Apte Organics Pvt. Ltd. and releasing the same through common drainage into common effluent treatment plant will amount to services rendered to a client for processing of goods.

The Bench observed -

++ The reliance placed on the CBEC letter no. 137/111/2007-CX.4 dated 13 July 2007 is correct and applicable in this case. In the said Circular/letter,CBEC had clarified that incineration/shredding of biomedical waste cannot be called as processing of goods and the said activity does not qualify as processing of goods on behalf of the client. In the case in hand, the same analogy will apply inasmuch appellant is treating waste received from Apte Organics for which they get paid.

++ It is common knowledge that disposal of waste water in the common effluent treatment plant of Maharashtra Pollution Control Board needs to adhere specifications acceptable for such disposal, which are achieved by the treatment undertaken by the appellant. Treatment of effluent waste cannot be considered as processing of the goods by any stretch of imagination, and we also note that the show cause notice does not invoke specific clause of the definition of Business Auxiliary Services for levy of tax.

Noting that the cited decisions of Bharuch Enviro Infrastructure Ltd. - 2008-TIOL-1382-CESTAT-AHM and Ferro Scrap Nigam Ltd. - 2014-TIOL-418-CESTAT-DEL apply to the case, the impugned order was set aside and the appeal was allowed.

(See 2016-TIOL-2702-CESTAT-MUM)