Service Tax Not Applicable on Liquidated Damages for Breach of MGT Agreement, No Service Activity Involved.

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....Levy of service tax - liquidated damages/compensation charges received by the Appellant towards the breach and non-compliance of Minimum Guaranteed Tonnage (MGT) as per Agreement - The recovery of liquidated damages/penalty from the other party in the instant case cannot be said to be towards any service per se, as the Appellant did not carry on any activity to receive the ‘compensation charges’. Hence, scope of levy of Service Tax cannot be extended to apply to situations where the actual activity was non-existent. - AT....