TaxTMI 
TaxTMI 
2025 (3) TMI 680
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..../1305/JP-1/ L-2/2015/842 dated 21.04.2016 April 2014 to March 2015 w.r.t. SCN 1 & April 2015 to March 2017 w.r.t. SCN 2 20-21/AJ/ADC/ DN/2018-19 dated 31.01.2019 3. ST/52266/2019 Asst. Commr./Dn.X/ST- V/06/2016-17 dated 19.07.2016 01.07.2012 to 31.03.2015 10/AJ/ADC/D.N. /2018-19 dated 30.11.2018. 2. The appellant herein is registered with Service tax Commissionerate and is engaged in the business of providing restaurant services. During the course of audit for the period as mentioned in the above table it was observed in Appeal No.51668/2019 that the appellant has generated income on account of "other income- notice period" during the said period. However, has not discharged the service tax on the notice pay received from the employee. The income as recorded is of Rs. 2,32,681/- during the period 01.07.2012 and Rs.13,90,210/- during the financial year 2014-15 under the hear "other income Notice period" which is the total amount recovered from employees who ceases to be in employment with them. 3. Department formed an opinion that in terms of section 66B of Finance Act, Service tax is leviable on the value of all services other than those....
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....d Rs.35,42,118/- during the financial year 20.04.2015 under the head "room charge- retention". Similar to the allegation as the one in appeal No.52265 i.e. alleging the aforesaid amount to have been received for rendering the declared service that the service tax amounting to Rs.4,53,387/- was proposed to be recovered vide Show Cause Notice No.06/2016-17 dated 19.07.2016. In three of these Show Cause Notices, the proposal therein were confirmed by the Original Adjudicating Authority vide orders as mentioned in the table above. The appeals against the said order have also been rejected. Being aggrieved, the appellant is before this Tribunal. 6. We have heard Mr.Kunal Agarwal, ld. Counsel for the appellant and Mr.Shashank Yadav, ld. Authorised Representative for the Department. 7. Ld. Counsel for the appellant has submitted that the issue involved in appeal No. 51668 / 2019 is Demand of service tax on the "Notice pay amount" which was collected from the outgoing/exiting employees for non-observance of pre-agreed notice period and in remaining 2 appeals i.e. bearing No. ST/52265/2019 & ST/52266/2019 is Demand of service tax under Section 66E (e) of the Act on the advance a....
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.... Excise and Service Tax V. South Eastern Coalfields Ltd. 2023 (8) TMI 606-SC Order 3. K.N. Food Industries Pvt. Ltd. V. Commissioner of CGST & CE, Kanpur 2020 (1) TMI 6-CESTAT Allahabad 4. Commissioner of Service Tax, Chennai v. Repco Home Finance Ltd. -2020 (7) TMI 472-CESTAT Chennai. 11. Ld. Departmental Representative has acknowledged that the issue involved in Appeal No.51668 about "notice pay" stands already covered in favour of the appellant by the decision of this Tribunal in Service Tax Appeal No.51642 / 2018 dated 31.01.2019, in the matter of KJS Cement Ltd. vs. Commissioner of CGST, Central Excise and Customs, Jabalpur. It is also acknowledged fairly by ld. Departmental Representative that the issue covered in remaining two appeals about service tax liability on room charge retention/ cancellation charges also stands decided by this Tribunal in Service Tax Appeal No.52200/2018-SM in the matter of Lemon Tree Hotel vs. Commissioner, Goods & Service Tax, Central Excise & Customs. 12. We have perused the decisions as relied upon by the ld. Counsel and acknowledged by ld. Departmental Representative and observe that in Balajee Medical Diagnostics (Supra....
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.... is outside the ambit of service. 2.9.3 Would amounts received by an employee from the employer on premature termination of contract of employment be chargeable to service tax? No. Such amounts paid by the employer to the employee for premature termination of a contract of employment are treatable as amounts paid in relation to services provided by the employee to the employer in the course of employment. Hence, amounts so paid would not be chargeable to service tax. However any amount paid for not joining a competing business would be liable to be taxed being paid for providing the service of forbearance to act." 17. Referring to the above clarification by the CBEC, High Court of Madras has, in GE T&D India Ltd. - 2019 (12) TMI - 1566 - Madras High Court held that notice pay, in lieu of sudden termination, does not give rise to the rendition of service either by the employer or the employee and allowed the writ petitions. Thus, the specific issue in this case is no longer res integra. GE T&D India Ltd. was followed in Intas Pharmaceuticals 2021 - TIOL - 367 - CESTAT - AHM, State Street Syntel Services Pvt. Ltd.- 2021 - TIOL - 152 - CESTAT - MUM., Shri Ra....
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....rty nor is it the intention of the other party to get penalized. 15. It also needs to be noted that section 65B(44) defines "service" to mean any activity carried out by a person for another for consideration. Explanation (a) to section 67 provides that "consideration" includes any amount that is payable for the taxable services provided or to be provided. The recovery of liquidated damages/penalty from other party cannot be said to be towards any service per se, since neither the appellant is carrying on any activity to receive compensation nor can there be any intention of the other party to breach or violate the contract and suffer a loss. The purpose of imposing compensation or penalty is to ensure that the defaulting act is not undertaken or repeated and the same cannot be said to be towards toleration of the defaulting party. The expectation of the appellant is that the other party complies with the terms of the contract and a penalty is imposed only if there is non-compliance. 16. In the present case admittedly there is no separate fee or charges recovered by the appellant from the customers/ recipients of hotel accommodation service, for not being appearin....