https://www.taxtmi.com/caselaws?id=790441 Amounts recovered as bundling error charges, rejection charges, non-compliance charges and similar contractual deductions were held not to constitute consideration for a declared service under Section 66E(e) of the Finance Act, 1994. A declared service for tolerating an act or situation requires an independent agreement in which one party accepts, for consideration, to refrain from an act, tolerate a breach, or do an act. Contractual penalties, liquidated damages and other deductions arising from default or non-performance are compensatory or deterrent in nature and do not, by themselves, establish taxable consideration. The demand was therefore unsustainable and the impugned order was set aside. en-us Thu, 16 Apr 2026 00:00:00 +0530 Sat, 25 Apr 2026 08:51:35 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=790441 Amounts recovered as bundling error charges, rejection charges, non-compliance charges and similar contractual deductions were held not to constitute consideration for a declared service under Section 66E(e) of the Finance Act, 1994. A declared service for tolerating an act or situation requires an independent agreement in which one party accepts, for consideration, to refrain from an act, tolerate a breach, or do an act. Contractual penalties, liquidated damages and other deductions arising from default or non-performance are compensatory or deterrent in nature and do not, by themselves, establish taxable consideration. The demand was therefore unsustainable and the impugned order was set aside. Case-Laws Service Tax Thu, 16 Apr 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=790441