2008 (11) TMI 182

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....t, it was found that this is the amount received from custodian/contractors as compensation for not performing certain jobs which ultimately had been performed by the respondents. The Department took the view that this amount has to be treated as their receipt for providing the taxable service of cargo handling and is liable to service tax. Accordingly, the respondent deposited the service tax amounting to Rs. 43,187/- along with interest of Rs. 6,585/- on 6-3-06. However, subsequently the Department issued a show cause notice on 4-1-07 for confirming the demand of service tax (which had already been paid by them and also for imposition of penalty on them under Sections 76, 77 & 78). The Dy. Commissioner vide order-in-original dt. 9-1-08 be....

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....there was genuine reason on part of the respondent for non-payment of service tax on the amount of Rs. 4,23,393/- received by them from the contractor / custodian. He pleaded that this amount had not been received from the client to whom the Cargo Handling Service was provided but had been received from the contractors custodian, as compensation for not doing certain jobs which they were supposed to perform, as a result of which those jobs had to be performed by the respondent and for this reason, only this amount had not been declared in the returns and no service tax has been paid. As soon as the Department pointed out that service tax is to be paid on this amount, they paid the same. He also pointed out that in course of hearing before t....