Goods transportation without consignment note stayed in the negative list; mining service demand was unsustainable.

Transportation of raw coal from the mine to the washery and washery rejects to the power plant through public roads was treated as transportation of goods, not mining service. Because no consignment note was issued, the activity did not fall within goods transport agency service and remained within the negative list under Section 66D(p)(i)(A) of the Finance Act, 1994. On that basis, the demand of service tax was not sustainable for the material period, and the related demand, interest, and penalties were set aside in favour of the assessee.

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Issues: Whether the appellant's activity of transporting coal and washery rejects was classifiable as mining service or as transportation of goods by road, and whether the absence of consignment notes excluded the service from service tax under the negative list.

Analysis: The contract showed transportation of raw coal from the mine to the washery and transportation of washery rejects to the power plant through public road. The activity was limited to transportation of goods and no consignment note was issued. Service by way of transportation of goods by road became taxable as goods transport agency service only where a consignment note was issued, and services falling outside that condition remained covered by the negative list under Section 66D(p)(i)(A) of the Finance Act, 1994.

Conclusion: The demand under mining service was not sustainable. The service was not liable to service tax for the material period, and the demand, interest, and penalties were set aside in favour of the assessee.

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