Goods Transport Agency liability requires a consignment note, while SEZ-authorised services remain exempt and refund may follow.

Liability under the goods transport agency category arises only when transport of goods by road is accompanied by issuance of a consignment note; absent that document, internal transport arrangements do not by themselves attract service tax. Services used for authorised operations in a Special Economic Zone remain exempt under the SEZ Act and Rules, which operate with overriding effect over inconsistent conditions. The demand was also beyond limitation because the department was already aware of the relevant facts and the extended period was not justified. Amounts already deposited were therefore refundable under the applicable refund mechanism.

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Issues: (i) Whether the appellant was liable to service tax as a goods transport agency when no consignment note was issued; (ii) Whether exemption under the Special Economic Zones Act, 2005 and the Special Economic Zones Rules, 2006 was available for the services involved; (iii) Whether the demand was barred by limitation; (iv) Whether refund of the tax already paid was admissible.

Issue (i): Whether the appellant was liable to service tax as a goods transport agency when no consignment note was issued.

Analysis: Liability under the goods transport agency entry depends on both provision of service in relation to transport of goods by road and issuance of a consignment note. On the facts found, no consignment note had been issued by the transporter. Mere transport arrangements or internal payment slips could not, by themselves, convert the activity into a taxable goods transport agency service.

Conclusion: The appellant was not a goods transport agency and no service tax liability arose under that entry.

Issue (ii): Whether exemption under the Special Economic Zones Act, 2005 and the Special Economic Zones Rules, 2006 was available for the services involved.

Analysis: The statutory scheme grants exemption from service tax for taxable services provided to a developer or unit for authorised operations in a Special Economic Zone. The exemption under Section 26 is subject to the manner prescribed by the Central Government, and Rule 31 implements that benefit for authorised operations. By virtue of the overriding effect of the Special Economic Zones Act, 2005, the demand could not be sustained by relying on a contrary conditional exemption notification or by introducing grounds not set out in the show cause notice.

Conclusion: The appellant was entitled to SEZ exemption for the services in question.

Issue (iii): Whether the demand was barred by limitation.

Analysis: The notice covered a period far beyond the normal limitation period. The record showed departmental awareness of the relevant facts in 2008 itself, and there was no basis for invoking the extended period. The notice was therefore belated.

Conclusion: The demand was time-barred.

Issue (iv): Whether refund of the tax already paid was admissible.

Analysis: Since the levy itself was unsustainable and the service was covered by the SEZ exemption mechanism, the amount already deposited was refundable under the applicable refund framework.

Conclusion: Refund of the amount deposited was admissible.

Final Conclusion: The service tax demand could not survive on merits or limitation, and the amount deposited by the appellant was directed to be refunded.

Ratio Decidendi: A service tax demand cannot be sustained where the statutory definition of the taxable category is not satisfied, the SEZ exemption applies to authorised operations, and the demand is also barred by limitation.

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