Mineral transportation treated as transport service, with tax demand failing for lack of corroborative evidence.

Transportation of minerals was held not to be mining service where the invoices, books of account and Form 26-AS showed the appellant as a transport contractor and no concrete evidence supported the mining classification. A circular was also noted as treating transportation of minerals, whether within or outside the mine, as taxable under the transportation category rather than as mining service. The service tax demand failed because it rested only on Income-tax Department data without independent corroboration of receipt of consideration for a taxable mining service.

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Issues: Whether the appellant's activity was classifiable as mining service or as transportation of goods by road, and whether the service tax demand could be sustained on the basis of income-tax data without corroborative evidence.

Analysis: The material on record did not establish that the appellant had rendered mining service. The invoices and books of account showed the appellant as a transport contractor, and the TDS reflected in Form 26-AS was consistent with transportation activity. The record did not contain concrete evidence to support classification under mining service. The circular relied upon also clarified that transportation of minerals, whether within the mine or outside it, is taxable under the relevant transportation category and not as mining service. The demand was also founded only on data received from the Income-tax Department, without independent corroboration to show receipt of consideration for a taxable mining service.

Conclusion: The appellant's activity was not liable to be classified as mining service, and the demand could not be sustained on the basis of uncorroborated income-tax data. The appeal succeeded.

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