2024 (7) TMI 8

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....n from service without serving the stipulated notice period amounts to consideration received for service of tolerating the act of employees and attracts service tax liability under Section 66E(e) of Finance Act, 1994. 2. M/s Biocon, appellant is registered under the category of 'Scientific and Technical consultancy', 'Renting of Immovable Property', 'Maintenance and Repair Services' and 'Management or Business Consultant Services'. The appellant employs large number of employees for the provision of the above service and as per the agreement, a notice period is specified before the employee could leave the employment and non-compliance of this entitles the appellant to recover an amount from the employees. During Audit, it is found that f....

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.... 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 case, the guidelines discussed above and jurisprudence that has evolved over time, may be followed in determining whether service tax on an activity or transaction needs to be levied treating it as service by way of agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act. Contents of Circular No. 178/10/2022-GST, dated 3rd August, 2022, may also be referred to in this regard. 5. The....

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....ions under consideration i.e. Section 66E(e) of the Finance Act and the Entry 5(e) of Schedule II of the CGST, Act are identically worded and are pari-materia. In this regard, learned counsel for the Appellant placed reliance on the following decisions: i. Kusum Ingots & Alloys Ltd. Vs. Union of India & Anr, (2004) 6 SCC 254, ii. State of Bihar Vs. S.K. Roy, 1966 (4) TMI 72- SUPREME COURT 7. Learned Counsel further submits that the issue is squarely covered by the following decisions of the Tribunal; i. GE T&D India ltd. Vs. Deputy Commr. of Central Excise, Chennai-2020 (1) TMI 1096-Madras High Court, ii. M/s. XL Health Corporation India Pvt. Ltd. Vs. Commissioner of Central Tax, Bengaluru South Commissionerate, 2022 (5) TMI 427 - ....