Tribunal modifies order on consultancy and damages, upholds hire charges. Commissioner's decision partially allowed.

The Tribunal set aside the demand on consultancy charges and liquidated damages but upheld it for hire charges. The Commissioner's order was modified accordingly, and the appeal was allowed in part.

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Issues involved: Appeal against service tax demand on consultancy charges, liquidated damages, and hire charges.

Consultancy Services: The appellant, a public sector undertaking for electricity transmission, collected amounts for consultancy services incidental to its transmission activities. The Tribunal held that service tax cannot be levied on such amounts, citing a Gujarat High Court decision exempting activities related to transmission and distribution of electricity from service tax.

Liquidated Damages: The Tribunal ruled that no service tax can be levied on amounts collected as liquidated damages or penalties for breach of contract terms, based on a previous decision and Board acceptance.

Hire Charges: The Commissioner confirmed the demand on hire charges for equipment rental, as the appellant failed to dispute the findings. The confirmation of demand for hire charges was upheld.

Conclusion: The Tribunal set aside the demand on consultancy charges and liquidated damages but upheld it for hire charges. The Commissioner's order was modified accordingly, and the appeal was allowed in part.

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