Liquidated Damages and Late Payment Charges Not Subject to Service Tax Under Section 66E(e)

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....CESTAT ruled that service tax cannot be levied on liquidated damages and late payment charges under Section 66E(e) of the Finance Act, as these do not constitute a declared service. The Tribunal referenced CBIC Circular No. 214/1/2023-S.T. and determined that recovery of liquidated damages cannot be considered a service since the appellant was not carrying out any activity to receive compensation, nor was there any intention by the other party to breach contracts. Additionally, the extended period of limitation and penalties were found untenable as there was no suppression of facts, especially considering the appellant's status as a public sector undertaking. The Tribunal set aside the original orders, allowing the appeal.....