https://www.taxtmi.com/caselaws?id=767583 Contractual recoveries such as liquidated damages, forfeiture of security deposits, fines and penalties for delay or breach were treated as penal clauses intended to protect commercial interests, not as consideration for any independent promise to tolerate default. Reading the agreement as a whole, the Tribunal found no separate service of toleration and held that the receipts did not fall within declared service under section 66E(e) of the Finance Act, 1994. It further applied the settled view that, without an independent agreement to tolerate, refrain from, or do an act for consideration, no taxable service exists under section 65B(44). The demand based on toleration of an act was therefore unsustainable and the impugned order was set aside. en-us Tue, 18 Mar 2025 00:00:00 +0530 Wed, 04 Feb 2026 13:08:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=767583 Contractual recoveries such as liquidated damages, forfeiture of security deposits, fines and penalties for delay or breach were treated as penal clauses intended to protect commercial interests, not as consideration for any independent promise to tolerate default. Reading the agreement as a whole, the Tribunal found no separate service of toleration and held that the receipts did not fall within declared service under section 66E(e) of the Finance Act, 1994. It further applied the settled view that, without an independent agreement to tolerate, refrain from, or do an act for consideration, no taxable service exists under section 65B(44). The demand based on toleration of an act was therefore unsustainable and the impugned order was set aside. Case-Laws Service Tax Tue, 18 Mar 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=767583