TaxTMI 
TaxTMI 
2021 (11) TMI 600
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.... was replied to have been received on account of non performance of the agreement to sale and non-compliance of the conditions of contract of supplier of goods. However, Department found that retaining said money by the appellant amounts to agreeing to the obligation to refrain from any, or to tolerate an act or a situation, or to do an act' and thus a consideration towards a 'declared service'. Accordingly, vide Show cause notice No. C.No.V(1)836/IAR/Gr.10/BHD/2016-17/1418 dated 6.04.2017 an amount if Rs, 29,81,912/- was proposed to be recovered as the service tax liability of the appellant towards the amount received on account of forfeiture of earnest money and on account of a sum being received as compensation for non-delivery of goods.....
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.... allowed. 4. Per contra learned Authorised Representative has laid emphasis upon the finding of the Commissioner (Appeals) as given in paragraph 7 of the Order under challenge where section 66E(e) of Finance Act, 1994 has duly been interpreted by Commissioner (Appeals). It has specifically been mentioned that the amount forfeited by the appellant of their clients/ service receivers on account of forfeiture of earnest money is taxable service. Impressing upon that there is no infirmity in the order under challenge, appeal is prayed to be dismissed. 5. After hearing the parties and rival contentions and perusing the records of the present appeal, I observe and hold as follows: The moot issue to be adjudicated herein is as to whether ....
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....with reference to its value, then such value shall- (i) in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him; (ii) in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money, with the addition of service tax charged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. ********** Explanation.-For the purposes of this section,- (a) "consideration" includes ....
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....ce tax with reference to value of service as a necessary corollary it is the value of service which are actually rendered, the value ..... is to be ascertained for the purpose of calculating the service tax payable thereupon. 8 Reverting to the facts of present case, following amounts have been alleged as consideration for "agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act" Amount sought to be taxed Description of transaction Clauses of contract Liquidated damages Liquidated damages are exacted for failure to deliver consignments within the delivery schedule Clause 11- General Condition of contract; Forfeiture of EMD Earnest Money Deposi....