Delayed payment charges excluded from service tax value as penal charges, with no basis for review interference.

Delayed payment charges levied for non-payment within the stipulated time were treated as penal in nature and, under the circular dated 03.08.2011, were not includable in the taxable value for service tax. Because that clarification pre-dated the refund claim, the Revenue's objection lost force, and the amount had already been refunded on 30.12.2021. On that basis, no ground was found to interfere with the earlier order in review, and the review petition was dismissed.

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Issues: Whether delayed payment charges were includable in the taxable value for service tax purposes, and whether any ground existed to interfere with the earlier order in review.

Analysis: The circular dated 03.08.2011 clarified that charges levied for delay in making payment by the service recipient are penal in nature for non-payment within the stipulated time and are not includable in the taxable value for charging service tax. As the circular pre-dated the refund claim, the exclusion of such amounts from taxable value rendered the Revenue's objection ineffective. The amount had also already been refunded by the Revenue on 30.12.2021.

Conclusion: Delayed payment charges were held not includable in the taxable value, and no ground for interference was found. The review petition was dismissed.

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