Goods transport agency service requires a consignment note; PDS transport without one falls outside service tax.

Transportation of food grains under the public distribution system was held not to amount to goods transport agency service because the defining feature of that taxable category was the issuance of a consignment note. The document issued by the District Supply Officer for movement of the goods did not constitute a consignment note, and the transport arrangement did not create a lien on the goods or otherwise give the activity the statutory character of a goods transport agency. The Tribunal followed its earlier view that individual transporters carrying PDS goods without a consignment note fall outside the service tax net, so service tax, interest, and penalty were not sustainable.

---

---

Issues: Whether transportation of food grains under the public distribution system constituted service by a goods transport agency so as to attract service tax, or whether the absence of a consignment note took the activity outside the taxable category.

Analysis: The appellant was engaged in transporting food grains under directions and control of the District Supply Officer. The defining element of a goods transport agency under the Finance Act was the issuance of a consignment note, and the document issued by the District Supply Officer for movement of the goods did not answer that description. The transportation arrangement did not confer any lien on the goods during transit, nor did it create the statutory character of a goods transport agency. The Tribunal followed its earlier view that individual transporters moving PDS goods without a consignment note do not fall within the taxable net under the relevant service tax provisions.

Conclusion: The activity was not taxable as goods transport agency service, and the demand of service tax, interest, and penalty could not stand.

---