TaxTMI 
TaxTMI 
2023 (4) TMI 919
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....also been contested along with the equal amount of penalty imposed on the confirmed demand. 2) The demand of Rs. 13,28,164/- on account of Service Tax on reimbursement of expenses paid to foreign entity and equal amount of penalty under section 78. 2. In respect of confirmed demand on account of service tax on Liquidated Damages, he produces Circular No. 214/1/2023-ST dt. 21.02.2023 wherein CBIC has considered the very same issue and discussed the decisions given by various co-ordinate benches of CESTAT. CBIC has given clarification that Service Tax is not leviable on Liquidated Damages received. He also relies on the case law of Krishnapatnam Port Company Ltd. vs CCE & ST, wherein this Hon'ble Tribunal has passed Final Order No. A/30056....
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....ly proved that the expenses were actually required to be made by the first person who could not make the payment but was made by the second person on specific instructions and such exact payment is claimed as reimbursement from the first person. Such specific evidence is not coming forth in the present case. Therefore, he submits that the reimbursements made by them are liable to be added to the consideration to arrive at the Service Tax payable. Hence, the Department has correctly quantified the Service Tax payable on such reimbursements. He submits that in spite of clear provisions brought in the statute towards treatment of reimbursements, still the party continued to take the abatement for more than two years and only in account of Audi....
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.... (9) TMI 1514] - while deciding whether Service Tax liability arises on the UI Charges received by the Company in terms of Section 66E(e) of the Finance Act, 1994, the Court held that UI Charges have been received by the Appellant only in those cases where the buyer has drawn more electricity than what was scheduled for him and does not amount to consideration for declared service. (iii) M/s. Lemon Tree Hotels v. Commissioner, GST, Central Excise & Customs [2019 (7) TMI 676] wherein it was held that 'cancellation charges' collected in lieu of cancellation of booking of hotel room does not attract Service Tax in terms of Section 66E(e) of the Finance Act. (iv) In M/s. South Eastern Coalfields Ltd. v. CCE & ST, Raipur [supra]- The Tribu....
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....cial decisions. In view of the above discussions, the impugned order cannot be sustained and is accordingly set aside. Thus, the Appeal, filed by the Appellant, is allowed with consequential relief, as per law." [emphasis supplied] 7. This Bench has passed another Final Order No. A/30130/2022 in the case of M/s Bharat Dynamics Ltd vs CCT, Hyderabad on this issue, wherein it was held as under: "7. Learned Counsel for the Appellant urges that the issue is no longer res integra and under similar facts and circumstances, this Tribunal in the case of Steel Authority of India Ltd, Salem vs Commissioner of GST & Central Excise, 2021(7) TMI 1092, Chennai, held that no service tax is payable on the amount collected towards liquidated damages,....
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....C has issued Circular No. 214/2023-Service Tax dt. 28.02.2023. In this Circular, the issue of leviability of Service Tax on Liquidated Damages has been considered in elaborate details. Various decisions of Tribunals have been considered at Para 5 of this Circular and in Para 6 the conclusion has been given as under: "6. In view of above, it is clarified that the activities contemplated under section 66E(e), i.e. when one party agrees to refrain from an act, or to tolerate an act or a situation, or to do an act, are the activities where the agreement specifically refers to such an activity and there is a flow of consideration for this activity. Field formations are advised that while taxability in each case shall depend on facts of the cas....