2024 (6) TMI 766

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....of earnest money deposited in financial year 2015-2016 amounts to tolerate an act and submission subsequent disposal of the transfer of the said amount of earnest money by the appellant will not change the taxability of already occurred event. 2. The facts, in brief, relevant for the purpose are as follows: That appellant is registered under Service Tax Commissionerate for discharging liability on Works Contract Service as the provider of service and on legal consultancy, rent a cab service, GTA service, as the recipient of service. During the course of audit of appellant's record, the verification of the ledgers of miscellaneous income for the period 2015-2016, department observed that appellant forfeited earnest money of Rs. 1,44,48....

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....as miscellaneous income instead of adjusting the same against the cost of the work. The said amount being the earnest money forfeited, subsequent to receipt of the impugned show cause notice, has been transferred and credited to the respective work and stands returned to the concerned sub-contractor. The benefit of such amount forfeited, therefore, stand passed on to the client. The supporting voucher dated 21.05.2021 was provided to the department dated 09.04.2021, but neither the original adjudicating authority nor the Appellate authority has considered the same. It is submitted that forfeiture of earnest money has already been denied to be an amount for consideration towards rendering 'declared service'. Otherwise also, the amount was no....

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....e case of M/s South Eastern Coalfields Ltd. versus Commissioner of Central Excise and Service Tax, Raipur reported as 2020 (120) TMI 912 - CESTAT New Delhi and the decision in the case of M/s Steel Authority of India Ltd. versus Commissioner of GST & Central Excise, Salem reported as 2021 (7) TMI 1092 - CESTAT Chennai. This Tribunal also in case titled as Tirupati Balaji Furnace Pvt. Ltd. versus Commissioner, CGST, Jaipur vide order dated 09.11.2021 in appeal No. ST/50105 of 2019 has held as follows : "The only purpose is for minimum compensation and of forfeiting the earnest money is to ensure that the default act is not undertaken again or repeated. However, from any stretch of imagination the retention of such amount cannot be s....