https://www.taxtmi.com/caselaws?id=800858 Encashment of bank guarantees for a shortfall in minimum guaranteed cargo tonnage does not constitute consideration for agreeing to tolerate an act or situation. The declared-service provision applies only where an agreement expressly or impliedly provides for tolerance in return for specified consideration. Amounts recovered for failure to meet committed cargo tonnage are penal charges designed to secure contractual performance and deter default, not consideration for any taxable service. Consequently, such bank-guarantee encashment is not taxable as a declared service, and related service-tax demand, interest and penalty are unsustainable. en-us Tue, 29 Sep 2026 00:00:00 +0530 Tue, 13 Oct 2026 07:22:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=800858 Encashment of bank guarantees for a shortfall in minimum guaranteed cargo tonnage does not constitute consideration for agreeing to tolerate an act or situation. The declared-service provision applies only where an agreement expressly or impliedly provides for tolerance in return for specified consideration. Amounts recovered for failure to meet committed cargo tonnage are penal charges designed to secure contractual performance and deter default, not consideration for any taxable service. Consequently, such bank-guarantee encashment is not taxable as a declared service, and related service-tax demand, interest and penalty are unsustainable. Case-Laws Service Tax Tue, 29 Sep 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=800858