TaxTMI 
TaxTMI 
2023 (4) TMI 54
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....m 01.07.2012 to 30.06.2017 is held to be a consideration for providing the declared service of tolerating the act or situation. The interest demanded and penalty imposed has also been assailed in the present appeal. 2. The facts in brief for the present adjudication are : The appellant herein is registered for providing various taxable services. The department based on intelligence came to know that the appellant is charging and recovering liquidated damages on account of delay in supply contract and service contract as per written agreement with their supplier. They have not paid the service tax towards that liquidation amount. Resultantly, a show cause notice No. 36-08/2018-19/418 dated 03.04.2018 was served upon the appellant propo....
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....ages, compensation and penalty arising out of breach of contract in the context of 'agreeing to the obligation to refrain from an act or to tolerate an act or a situation, or to do an act'. However, learned Departmental Representative acknowledged the decision of this Tribunal in the case of Northern Coalfields Limited (supra). 6. Having heard the rival contentions, perusing the record of the appeal and after going through various decisions of the Tribunal, as has been relied upon by both the sides, we are of the opinion that issue involved herein is: "Whether the liquidated damages collected due to breach of condition of contract as far as the time line for supply is concerned, are the consideration towards providing de....
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....n from an act, would be a 'declared service' under section 66E(e) read with section 65B(44) and would be taxable under section 68 at the rate specified in section 66B. Likewise, there can be services conceived in agreements in relation to the other two activities referred to in section 66E(e). 27. It is trite that an agreement has to be read as a whole so as to gather the intention of the parties. The intention of the appellant and the parties was for supply of coal; for supply of goods; and for availing various types of services. The consideration contemplated under the agreements was for such supply of coal, materials or for availing various types of services. The intention of the parties certainly was not for flouting the terms ....
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.... party purchasing coal had an option to purchase coal from 'A' or from 'B' and if in such a situation 'A' and 'B' enter into an agreement that 'A' would not supply coal to the appellant provided 'B' paid some amount to it, then in such a case, it can be said that the activity may result in a deemed service contemplated under section 66E (e). 30. The activities, therefore, that are contemplated under section 66E(e), when one party agrees to refrain from an act, or to tolerate an act or a situation, or to do an act, are activities where the agreement specifically refers to such an activity and there is a flow of consideration for this activity." 8. The decision rendered in appellants' own case vide Final Order No. 50879/2022 dated....