https://www.taxtmi.com/caselaws?id=771643 CESTAT Delhi held that penal charges recovered for delayed performance under contracts are not liable to service tax. The tribunal distinguished between contract conditions and consideration, ruling that retention amounts for non-performance within stipulated time remain contract conditions rather than taxable consideration. Relying on SC precedent and GST/ST circulars clarifying such charges are non-taxable, CESTAT determined no service tax liability exists under Section 66E(e) of Finance Act. Consequently, interest and penalty impositions were also unsustainable. Appeal allowed. en-us Thu, 22 May 2025 00:00:00 +0530 Thu, 29 May 2025 08:41:11 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=771643 CESTAT Delhi held that penal charges recovered for delayed performance under contracts are not liable to service tax. The tribunal distinguished between contract conditions and consideration, ruling that retention amounts for non-performance within stipulated time remain contract conditions rather than taxable consideration. Relying on SC precedent and GST/ST circulars clarifying such charges are non-taxable, CESTAT determined no service tax liability exists under Section 66E(e) of Finance Act. Consequently, interest and penalty impositions were also unsustainable. Appeal allowed. Case-Laws Service Tax Thu, 22 May 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=771643