2022 (9) TMI 1445

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....nance Act, 1994. 2. The Brief facts are that the appellant is involved in manufacture of "Defence Equipment" and are registered under the provisions of Central Excise for manufacture of various products including Milan 2T, Konkurs M, invar, Akash, etc. They are also registered with the service tax department for providing/receiving various taxable services such as Maintenance and Repair, Technical Inspection, Erection Commissioning and Installation Service, etc. The Appellant is a PSU under the administrative control of Ministry of Defence. In the course of its business, the Appellant entered into various agreements with suppliers by inviting tenders. The tender notice contains a penalty clause to the effect that the supplier will be lia....

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....ted 15.05.2017 inter alia contending that the receipts by way of liquidated damages/penalties does not fall under the purview of declared services, as the expression "agreeing to tolerate an act" cannot be construed to include the amount which is charged as penalty for breach of terms and conditions of the contract, as mutually agreed. It was also contended that notice pay recovery is within the purview of employment agreement and does not attract service tax. Further contended that the Appellant have maintained proper books of accounts, and admittedly all these transactions are recorded in the books of accounts maintained in the ordinary course of business. Thus, there is no case of any wilful suppression etc. and hence the extended period....