https://www.taxtmi.com/caselaws?id=769480 The CESTAT New Delhi ruled that amounts collected as forfeiture of security deposits, earnest money, and fines/penalties for delayed work completion are not subject to service tax under Section 66E(e) of the Finance Act, 1994. The tribunal held these amounts lack nexus with taxable services and constitute penal charges for contract breach rather than consideration for services. The amounts cannot be termed 'consideration' under Section 65B(44) as they don't flow from independent agreements for declared services. The tribunal cited departmental circular clarifying that Section 66E(e) requires specific agreements with consideration flow for covered activities. Appeal was allowed. en-us Fri, 25 Apr 2025 00:00:00 +0530 Sat, 26 Apr 2025 08:30:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=769480 The CESTAT New Delhi ruled that amounts collected as forfeiture of security deposits, earnest money, and fines/penalties for delayed work completion are not subject to service tax under Section 66E(e) of the Finance Act, 1994. The tribunal held these amounts lack nexus with taxable services and constitute penal charges for contract breach rather than consideration for services. The amounts cannot be termed 'consideration' under Section 65B(44) as they don't flow from independent agreements for declared services. The tribunal cited departmental circular clarifying that Section 66E(e) requires specific agreements with consideration flow for covered activities. Appeal was allowed. Case-Laws Service Tax Fri, 25 Apr 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=769480