Common effluent treatment plant exemption confirmed for operation and maintenance services despite adjudication non-cooperation.

Service tax exemption was available for operation and maintenance of a common effluent treatment plant not situated as part of a factory. Notification No. 25/2012-S.T. covered operation and maintenance of waste water treatment plants, while Notifications No. 6/2015-S.T. and No. 8/2017-S.T. clarified that treatment services by operators of common effluent treatment plants remained exempt for the relevant period. The plant here was outside a factory, and the department did not seriously dispute entitlement under the notifications. Mere non-cooperation in adjudication could not justify denial of the exemption or sustain a contrary tax demand, so the assessment was quashed to that extent.

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Issues: Whether service tax exemption was available for operation and maintenance services rendered in respect of common effluent treatment plants not situated as part of a factory, and whether non-cooperation in adjudication could justify denial of the exemption.

Analysis: The exemption under Notification No.25/2012-S.T. covered services of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration and operation of waste water treatment plants, excluding those situated as part of a factory. Notification No.6/2015-S.T. clarified that services rendered by operators of common effluent treatment plants by way of treatment of effluent were exempt, and Notification No.8/2017-S.T. reiterated that the exemption applied for the relevant earlier period as well. The plant concerned was not part of a factory, and the department did not seriously dispute the legal entitlement to exemption. Mere non-cooperation in the adjudication proceedings could not sustain an assessment contrary to the applicable notifications and clarifications.

Conclusion: The petitioner was entitled to the exemption, and the assessment order was quashed to the extent it levied service tax on operation and maintenance of the common effluent treatment plant.

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