Tribunal exempts waste water processing from Service Tax, grants waiver

The Tribunal ruled in favor of the appellant, M/s. Odyssey Organics Pvt. Ltd., determining that processing waste water does not constitute 'Business Auxiliary Services' subject to Service Tax liability. The Tribunal found that waste water does not qualify as goods and referenced a Board Circular to support the appellant's argument. As a result, the Tribunal granted an unconditional waiver from pre-deposit of dues and stayed the recovery process pending the appeal.

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Issues involved: Determination of whether the activity of processing waste water amounts to 'Business Auxiliary Services' for the purpose of Service Tax liability.

The appellant, M/s. Odyssey Organics Pvt. Ltd., undertook processing of waste water before it was sent for further treatment and disposal. The department alleged that this activity falls under 'Business Auxiliary Services' and demanded Service Tax along with interest and penalty. The lower appellate authority upheld the demand, leading to the appellant's appeal before the Tribunal.

The appellant argued that a similar matter regarding bio-medical waste was considered by the Board, where it was clarified that such activities do not qualify as 'processing of goods' or 'provision of service on behalf of the client' under taxable services. Citing precedents, the appellant requested a stay on the demand.

The Revenue, represented by the ld. Superintendent (AR), supported the findings of the lower authorities.

After considering the submissions, the Tribunal noted that waste water itself cannot be considered as goods, and referred to a Board Circular regarding bio-medical waste to support the appellant's position. Consequently, the Tribunal found merit in the appellant's case and granted an unconditional waiver from pre-deposit of the dues, staying the recovery during the appeal process.

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