Coal transport within mining area treated as goods transport, not mining service, so service tax demand failed.

Transportation of coal from the coal face to railway siding, dumps and stock yards within the mining area was treated as transport of goods by road service, not as mining service, because the issue had already been settled by the Supreme Court and earlier Tribunal rulings. The Tribunal also noted that, for the period after 01/07/2012, abatement remained available for goods transport agency services and the activity could not be reclassified as mining service under the post-negative-list regime. On that basis, no service tax liability survived on the disputed transportation activity and the demand was held unsustainable.

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Issues: Whether the transportation of coal from the coal face to railway siding, dumps and stock yards within the mining area was classifiable as mining service so as to attract service tax, or whether it fell under transport of goods by road service with consequential relief from service tax demand.

Analysis: The dispute turned on the proper classification of the transportation activity undertaken within the mining area. The Tribunal noted that the issue had already been settled by the Supreme Court and by earlier Tribunal decisions holding that transportation of coal from pit-heads to railway sidings within the mining area is appropriately classifiable as transport of goods by road service and not as service in relation to mining. For the period after 01/07/2012, the Tribunal also relied on the continued availability of abatement for goods transport agency services under the relevant notifications and held that the transportation activity could not be bundled into mining service under the post-negative-list regime. The Tribunal therefore followed the settled view that no service tax liability survived against the appellants on the disputed transportation activity.

Conclusion: The transportation activity was not taxable as mining service and the demand was unsustainable. The appeal was allowed in favour of the assessee.

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