Service tax on supplier-delivered goods transport charges was not payable where suppliers were not goods transport operators.

Service tax on transportation charges was not exigible where goods were delivered directly by suppliers to the assessee's premises, because the taxable service under the Finance Act, 1994 applied only to a service provided by a goods transport operator. The suppliers were not shown to be commercial concerns engaged in transportation of goods, so they could not be treated as goods transport operators for tax purposes. On that basis, the transportation charges did not fall within the taxable category and the refund claim was maintainable.

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Issues: Whether service tax was payable on transportation charges where goods were delivered directly by suppliers and the suppliers were not goods transport operators.

Analysis: Taxable service under Section 65(41)(m) of the Finance Act, 1994 applies only to a service provided by a goods transport operator, and Section 65(17) defines a goods transport operator as a commercial concern engaged in transportation of goods. Where the goods were delivered directly by the suppliers at the assessee's premises, the suppliers could not be treated as transporters or as a commercial concern providing taxable transport service.

Conclusion: The service tax was not payable and the refund claim was maintainable.

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