Transportation of goods by road

[Debtosh Dey]

In an adjudication, we have taken a stand that coal transported out of mining area to railway siding through public road, cannot be a mining service. It is a transportation (GTA) service being not confined to mining area and thereby, the consignee is liable to pay tax (with erstwhile abatement of 75%). I need case law(s) to support our argument. Can any one help me ?

[YAGAY andSUN]

Dear Debtosh Dey,

Please confirm following

1. Whether the transporter had issued consignment notes to you?
2. On what basis you claimed the abatement? Whether any declaration from the transporter had been obtained that they had not availed the CENVAT credit on Input Services, Inputs and on capital goods?

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

[Debtosh Dey]

Yes, we had issued consignment notes to mine owner. Since GTA service as we understand, for use of public road to transport off the mines, we did not charge service tax as the mine owner (a company), was liable to pay tax. We did declare this in the invoices and have not availed Cenvat against this service. As notifications on mining are not clear, I need a case law reference as stated earlier.

[Manoj Agarwal]

Dear Sir,

In my view, the stand taken by you is correct and legally sustainable. Subject to the terms of the agreement, you are providing GTA service to the mining company and issuing consignment note so the service tax thereon (after abatement) shall be payable by the person liable to pay freight.

Regards,

Manoj Agarwal,

Service Tax Consultant

+91-9937041788

[Debtosh Dey]

Thanks. There are some flaws in scoping for mining service for which, the department tends to extend it till wagon loading outside mines. That is why, I am looking for relevant case law.

AI Summary

Transportation service liability: consignee must pay service tax on road transport of mined coal with abatement. When coal is transported from a mine to a railway siding over a public road and the activity is not confined to the mining area, the movement is characterized as a Goods Transport Agency service rather than a mining service; the consignee is liable to pay service tax after applicable abatement. Issuance of consignment notes, contractual allocation of liability, and declarations that the transporter has not availed CENVAT credit on inputs, input services or capital goods are operative facts supporting the transportation-service treatment and the recipient's tax liability.