https://www.taxtmi.com/caselaws?id=440609 Liquidated damages, penalty and forfeiture of security deposits for breach or non-performance are not automatically a declared service under section 66E(e) unless there is a separate agreement to tolerate the act or situation for consideration. A contractual clause that only secures commercial compliance does not create a taxable bargain to accept breach, and the consideration remains for supply under the underlying contract rather than for default. On that basis, the service tax demand is not sustainable, and the consequential interest and penalty also fail. The stated position is said to be consistent with the later Board circular clarifying that such recoveries are not per se exigible to service tax. en-us Thu, 06 Jul 2023 00:00:00 +0530 Sat, 22 Jul 2023 21:53:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=440609 Liquidated damages, penalty and forfeiture of security deposits for breach or non-performance are not automatically a declared service under section 66E(e) unless there is a separate agreement to tolerate the act or situation for consideration. A contractual clause that only secures commercial compliance does not create a taxable bargain to accept breach, and the consideration remains for supply under the underlying contract rather than for default. On that basis, the service tax demand is not sustainable, and the consequential interest and penalty also fail. The stated position is said to be consistent with the later Board circular clarifying that such recoveries are not per se exigible to service tax. Case-Laws Service Tax Thu, 06 Jul 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=440609