ONGC Ltd. Vs Commissioner of Central Excise & Service Tax (CESTAT Chennai)
Transportation of effluents cannot be treated as transportation of ‚goods‛ and hence there cannot be any service tax liability under ‘Goods Transport Agency’ as defined in Section 65 (150b) of the Finance Act, 1994. This being so, the tax liability of Rs.1 1,24,258/- and the penalty imposed thereof cannot sustain and are set aside.
FULL TEXT OF THE CESTAT JUDGMENT
The appellants are a Public Sector Undertaking primarily engaged in the oil and gas exploration activities around Karaikkal region. Appellant inter alia extracts well fluids from the well head which is then transported to the production installations where the effluent water is separated from the well head. The crude oil that emerges is then sent to the refinery through pipeline. Effluent water separated from the condensate is transported to the Effluent Treatment Plant (ETP) to fulfil pollution control norms. The present dispute revolves around three alleged taxable activities —
| 1. | Service tax liability on freight paid towards transportation of crude oil and condensate within the operational area | Rs.79,90,126
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| 2. | Freight paid towards transportation of effluents out of operational area to ETP
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Rs.11,24,258
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| 3. | Alleged short paid amount of service tax in respect of transportation services received for transport of various goods out of operational Area | Rs.67,935
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