2022 (9) TMI 1587

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....r section 66E (e) of the Finance act 1994. 2. The Brief facts are that the Appellant is engaged in manufacture of heavy power electrical equipment and is registered under the provisions of Central Excise and Service Tax for manufacture of various products, including providing of services like Engineering Consultancy Services, Erection and Commissioning Service, etc. The Appellant is a PSU. 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 liable to pay penalty at rates specified, per week, for any delay caused by the supplier. Accordingly, under the terms of contract, the Appellant have been rec....

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....nalties 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 of limitation is not invokable. 5. The SCN were adjudicated on contest and demand ha....