TaxTMI 
TaxTMI 
2024 (12) TMI 11
X X X X Extracts X X X X
X X X X Extracts X X X X
....ruitment/Supply Agency Service 3. Security Detective Agency Service 4. Rent-a-Cab Scheme Operative Service 5. Renting of Immovable Property Service & 6. Works Contract Service. 2. During the Audit of records of the appellant for the period from April 2014 to March, 2016, the department observed that the appellant has forfeited the amount received in the name earnest money / security deposits of the contractors retaining the said amount as fines and penalties imposed on those various contractors, in the name of liquidated damages for delayed completion of works. The appellant was alleged to have failed to pay the following amount of service tax. (i) failed to pay Service Tax amounting to Rs.134....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en confirmed vide Order-in-Original No.25/2018 dated 14.12.2018. The appeal against the said order has been dismissed vide Order-in-Appeal No. 301 (CRM)ST/JDR/2019 dated 26.03.2019. Still being aggrieved, the present appeal has been filed by the appellant. 5. We have heard Mr. Shivam Bansal, ld. Counsel for the appellant and Mr. Aejaz Ahmed, ld. Authorised Representative for the department. 6. Ld. Counsel for the appellant has mentioned that the amount recovered by the appellant is not a consideration for providing any service as for an amount to qualify as consideration there has to be "quid pro quo". However, the appellant had not undertaken any activity against the recovery of such amount. Hence the retention of amount do not quali....
X X X X Extracts X X X X
X X X X Extracts X X X X
....data only. There is no element or fraud or suppression as has been established by the Department. The Show Cause Notice is alleged to be barred by time. The order is prayed to be set aside on merits as well as on the grounds of limitation and the appeal is prayed to be allowed. 8. Ld. DR on the other hand has submitted that as per Section 66E(e) of Finance Act, 1994 agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act is a 'Declared Service'. In the instant case, the service provider have performed act viz. poor performance of work, not meeting the obligations in full, less than expected quality of work, delayed completion of work etc. and hereby resulted in non-compliance of mu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dated damages, compensation, forfeiture amounts, cancellation charges etc. stands settled by various pronouncements wherein it has consistently been held that the said amounts recovered as charges for breach or non-compliance of contractual terms and conditions cannot be construed as 'consideration' for 'refraining or tolerating an act' and were thus not leviable on Service Tax in terms of Section 66E(e) of the Finance Act, 1994. Reliance in this regard is placed on the following decisions : (i) M/s. K.N. Food Industries Pvt. Ltd. v. Commissioner of CGST & Central Excise, Kanpur [2019-VIL-731-CESTAT-ALH-ST] wherein it was held that if a contract provides for an eventuality which is uncertain and also remedy if that eventuality occu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rt : (a) Commissioner of Service Tax v. M/s. Bhayana Builders (P.) Ltd. [2018 (2) TMI 1325] = 2018 (10) G.S.T.L. 118 = [2018] 91 taxmann.com 109/66 GST 320 wherein the Apex Court observed that any amount charged which has no nexus with the taxable service and is not a consideration for the service provided does not become part of the value which is taxable under the Finance Act. (b) Union of India v. International Consultants and Technocrats [2018 (10) G.S.T.L. 401 (S.C.)] - since Service Tax is with reference to the value of service, as a necessary corollary, it is the value of the services which are actually rendered, the value whereof is to be ascertained for the purpose of calculating the Service Tax payable thereupon.....