https://www.taxtmi.com/caselaws?id=447558 Re-linquishment charges recovered for premature surrender of access rights to the inter-state transmission system were held not to be consideration for the declared service of tolerating an act under section 66E(e) of the Finance Act, 1994. The record showed that the payment was compensatory in nature, linked to non-performance or early exit, rather than an express or implied agreement to tolerate an act in return for consideration. Penal or compensatory recoveries arising from breach or contractual non-performance are conditions of the contract, not taxable consideration for a service. Accordingly, the charges were not liable to service tax. en-us Wed, 15 Nov 2023 00:00:00 +0530 Fri, 29 Dec 2023 18:41:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=447558 Re-linquishment charges recovered for premature surrender of access rights to the inter-state transmission system were held not to be consideration for the declared service of tolerating an act under section 66E(e) of the Finance Act, 1994. The record showed that the payment was compensatory in nature, linked to non-performance or early exit, rather than an express or implied agreement to tolerate an act in return for consideration. Penal or compensatory recoveries arising from breach or contractual non-performance are conditions of the contract, not taxable consideration for a service. Accordingly, the charges were not liable to service tax. Case-Laws Service Tax Wed, 15 Nov 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=447558