Consignment note requirement governs GTA classification, and freight-tax liability follows the statutorily designated payer, not the transporter.

A goods transport activity qualifies as a Goods Transport Agency service only where a consignment note, lorry receipt or similar document is issued; transport under documents issued by a nominated consignor, without such a note, does not satisfy that statutory element and falls outside the taxable GTA category. Where freight is carried under a specified statutory arrangement, service tax liability does not rest on the transporter but on the person designated as liable to pay freight. On that reasoning, the demand and penalties could not be sustained and consequential relief followed.

---

---

Issues: (i) Whether the appellant's activity amounted to service by a Goods Transport Agency within the meaning of the Finance Act, 1994; (ii) whether, even if treated as a Goods Transport Agency, service tax was payable by the appellant in view of Rule 2(l)(d)(v) of the Service Tax Rules, 1994.

Issue (i): Whether the appellant's activity amounted to service by a Goods Transport Agency within the meaning of the Finance Act, 1994.

Analysis: The essential feature of a Goods Transport Agency is the issuance of a consignment note. On the facts found, the appellant transported goods under transport documents issued by the nominated consignor and did not issue any consignment note, lorry receipt, or similar document evidencing the liability and control associated with a Goods Transport Agency. The transportation was part of a public distribution arrangement and the documents relied upon could not be treated as consignment notes.

Conclusion: The appellant was not a Goods Transport Agency and the activity did not fall within the taxable service under Section 65(105)(zzp) of the Finance Act, 1994.

Issue (ii): Whether, even if treated as a Goods Transport Agency, service tax was payable by the appellant in view of Rule 2(l)(d)(v) of the Service Tax Rules, 1994.

Analysis: The goods were transported for specified persons under the statutory scheme and, on that footing, the liability to pay tax would not rest on the appellant. The rule placed the burden, if any, on the person liable to pay freight, namely the Deputy Commissioner, and not on the transporter.

Conclusion: The appellant was not liable to pay service tax under Rule 2(l)(d)(v) of the Service Tax Rules, 1994.

Final Conclusion: The demand and penalties could not be sustained, and the appeal succeeded with consequential relief.

Ratio Decidendi: Issuance of a consignment note is an essential condition for classification as a Goods Transport Agency, and where that element is absent, the transporter does not fall within the taxable category; in a specified freight-payment arrangement, liability follows the statutory person designated to pay the freight.

---