TaxTMI 
TaxTMI 
2025 (4) TMI 569
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....N OIO OIA Service Tax Demand 1 ST/52134/2019 C. No. IAR/1862/Gr. 29/ UDR/2016-2017/4 dated 8.2.2018 2013-14 to 2015-16 No. 32/2018-(ST) Dy. Commissioner (Demand) dated 6.8.2018 passed by Ld. Deputy Commissioner, Central Excise & CGST Division-G, Chittorgarh No. 383 - 384(CRM)ST/JDR/2019 dated 24.4.2019 passed by Ld. Commissioner (Appeals), Central Excise & CGST Jodhpur, Rajasthan Rs. 45,84,626 2. ST/52135/2019 C. No. IV(16)ST/SCN/ 14/2018/800 dated 26.4.2018 April, 2016 to June, 2017 (upto June, 2018) No. 39/2018(ST) - AC (demand) dated 15.11.2018 passed by Ld. Assistant Commissioner, Central Excise & CGST Division-G, Chittorgarh No. 383 - 384(CRM)ST/JDR/2019 dated 24.4.2019 passed by Ld. Comm....
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....uid pro quo' or an "activity for such consideration". However, the appellant has not undertaken any activity against the recovery of amounts in question. Hence, there is no element of 'service' which is defined under section 65B (45) of the Finance Act. The activity has wrongly been taxed under section 66E(e) of Finance Act. The disputed amounts are nothing but the penal charges which have been recovered by the appellant with the intention to make good the losses and to also act as a deterrent to ensure that buyer or supplier do not violate the terms of contract any further. 5. It is submitted that this issue is no longer res integra its sands decided in an appellant's own case. The order-in-appeal under challenge has ignored such previo....
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....2. Further, the issue of leviability of Service tax on penalty, liquidated 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 ev....
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....not be sustained and also relied on the following decisions of the Hon'ble Supreme Court : (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 ....
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....act, are the activities where the agreements specifically refers to such an activity and there is a flow of consideration for this activity. The decision of this Tribunal in the case of Dy. General Manager (Finance), Bharat Heavy Electricals Limited in appeal No.50080 of 2019 wherein the earlier decision of the Tribunal in the case of M/s. South Eastern Coalfields (supra) was dealt with, has been referred in this Circular. 11. The Board has decided to not to file any appeal against the decision in M/s. South Eastern Coalfields (supra). The said decision has also been upheld by Hon'ble Supreme Court vide its order dated 11.07.2023 passed in the case of Commissioner of Central Excise and Service Tax vs. South Eastern Coal Fields Limited in....