Road transport without consignment note falls outside GTA service and may remain exempt from service tax.

Transportation of goods by road without issuance of a consignment note was treated as outside Goods Transport Agency service, and the activity was also found to fall within the negative list for road transportation. The allied loading, unloading and handling of agricultural produce was further covered by the exemption under Notification No. 25/2012-ST. On that basis, the service tax demand was held unsustainable, and the related interest and penalties were also set aside because the extended period could not be invoked.

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Issues: Whether the transportation and handling activities undertaken by the appellant were covered by the negative list or exempt from service tax, and whether the demand of service tax, interest and penalties could be sustained.

Analysis: The appellant's work under the agreements was not confined to mere transportation by road. The lower findings proceeded mainly on the absence of consignment notes and on the view that the appellant had provided taxable cargo handling services. The record showed that the appellant had undertaken transport of food grains along with allied handling functions. However, the decisive factor was that transportation of goods by road without issuance of a consignment note does not bring the activity within Goods Transport Agency services. The services were also found to fall within the negative list relating to transportation of goods by road and within the exemption for loading, unloading and handling of agricultural produce under Notification No. 25/2012-ST dated 20.06.2012. On that basis, the invocation of the extended period and the consequent levy of interest and penalties were not sustainable.

Conclusion: The demand of service tax could not be sustained and the impugned order, along with the interest and penalties, was set aside in favour of the assessee.

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