Transportation contract with incidental loading and supervision is not clearing and forwarding service; tax liability falls on the recipient.

Where the contract's substance was transportation of coal, with incidental loading, unloading, supervision and liaison work, the activity did not amount to clearing and forwarding agent service under Section 65(25) of the Finance Act, 1994. The service required clearing operations and forwarding of goods at the instance of the principal, which were absent here; the activity was therefore properly classifiable as Goods Transport Agency service. Consistently with the distinction applied in Coal Handlers Pvt. Ltd., service tax liability rested on the recipient rather than the appellant, and the demand raised against the appellant was unsustainable.

---

---

Issues: Whether the appellant's activities fell within the scope of clearing and forwarding agent service; and whether service tax was payable by the appellant or by the service recipient.

Analysis: The activity described in the purchase order was principally transportation of coal, together with loading, unloading, supervision and liaison work, on payment per metric ton. On the definition of clearing and forwarding agent under Section 65(25) of the Finance Act, 1994, the activity had to involve clearing operations and forwarding of goods at the instance of the principal. The appellant's role was held to be transport-related and not a clearing and forwarding operation. The classification was consistent with the principle applied by the Supreme Court in Coal Handlers Pvt. Ltd., relied upon for the distinction between clearing and forwarding services and transportation activity.

Conclusion: The activity was not clearing and forwarding agent service; it was properly classifiable as Goods Transport Agency Service, and the service tax liability rested on the recipient, not the appellant.

Final Conclusion: The demand of service tax against the appellant was unsustainable, and the impugned order was set aside with relief to the appellant.

Ratio Decidendi: Where the substance of the contract is transportation with incidental loading, unloading and supervision, and not clearing and forwarding operations on behalf of the principal, the service cannot be classified as clearing and forwarding agent service.

---