2024 (1) TMI 399

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....appellant received raw material namely 50% PET and 50% HPA non-woven fabric and the same was used in manufacture of their final product. The said raw material purchased by the appellant was found to be of poor quality. The appellant raised the issue with the supplier of the goods, who entertained the claim of the appellant and the appellant received the claim amount and shown in their books of account as 'income from other sources'. During the course of audit, it was found that the said amount should be taxed as service tax under sub-section (e) of section 66 (E) of the Finance Act, 1994 as same is for an act of tolerance for which appellant received compensation from the supplier. The matter was adjudicated, the demand of service tax was c....

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....nature of compensation received by the appellant for receiving poor quality of goods. 8. In that circumstances, I find that the said act is covered under declared service under sub-section (e) of section 66 (E) of the Finance Act, 1994 as it is an act of tolerance by the appellant for which appellant received compensation for receiving poor quality of goods. 9. In that circumstances, I do not find any merit in appeal filed by the appellant. Accordingly, the same is dismissed by upholding the impugned order. ( Dictated and pronounced in open court. ) ============= Document 1 to Purchase Pill INVOICE (FOR HOME CONSUMPTION 4 Arvind .09 DUPLICATE FOR TRANSPORTE INVOICE CUM DELIVERY CHALLAN (FOR REMOVAL OF EXCISAB....