Coal transport within mining area treated as goods transport by road, with no sustainable service tax demand

Transportation of coal from the coal face to the railway siding within the mining area was treated as transport of goods by road service, not mining service. For the post-01.07.2012 period, the goods transport agency abatement remained available and the service tax on the transportation had already been discharged by the recipient, so the demand could not survive. The activity also could not be artificially clubbed into a single mining service under Section 66F of the Finance Act, 1994.

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Issues: Whether the loading and transportation of coal within the mining area was classifiable under mining service or under transport of goods by road service, and whether the service tax demand survived for the periods before and after 01.07.2012.

Analysis: The activity of transporting coal from the coal face to the railway siding within the mining area had already been held to fall under transport of goods by road service and not under mining service. For the post-01.07.2012 period, the benefit of abatement available to goods transport agencies continued, and the service tax on transportation had already been discharged by the recipient. The activity could not be clubbed into a single mining service under Section 66F of the Finance Act, 1994.

Conclusion: The demand of service tax was not sustainable and the appeals were allowed.

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