TaxTMI 
TaxTMI 
2025 (4) TMI 818
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.... leaving University before notice period, whether the amount forfeited from the students, who discontinue the course midway can be considered as liquidated damages or as a service under the category of declared service. As per the impugned orders, Adjudication authority had confirmed the demand along with interest and imposed penalties under the provisions of the Finance Act, 1994. Aggrieved by the said orders, following appeals were filed before the Tribunal. Sl. No. 1 2 3 Appeal No. ST/21982/2018 ST/21983/2018 ST/20051/2020 Period July 1, 2012 to Sept 30, 2015 July 1, 2012 to Sept 30, 2015 October 1, 2015 to June 30, 2017 S. Tax Rs. 1,24,32,835 Rs. 14,33,556 Rs. 32,02,954 2. Since the iss....
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....d by the judgment of Hon'ble High Court of Madras in the matter of GE T&D India Ltd. [2020 (1) TMI 1096-Madras High Court], wherein it is held that:- "10. The provisions of Section 66E(e) appear to have given rise to some ambiguity, on this very issue, clarified by the Central Board of Excise and Customs (CBEC) in CBEC's Guidance Notes dated 20.06.2012. At para 2.9.3 the Board states as follows: 2.9 Provision of service by an employee to the employer 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 terminatio....
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....e rise to the rendition of service either by the employer or the employee." 3. The learned Counsel also draws our attention to the Circular No. 178/10/2022-GST 03.08.2022 regarding forfeiture of salary or payment of bond amount in the event of the employee leaving the employment before the minimum agreed period and it is clarified that:- "7.5. An employer carries out an elaborate selection process and incurs expenditure in recruiting an employee, invests in his training and makes him a part of the organization, privy to its processes and business secrets in the expectation that the recruited employee would work for the organization for a certain minimum period. Premature leaving of the employment results in disruption of work an....
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....oyees, who are not serving the mandated notice period at the time of their resignation from the appellant. Fee forfeiture is an amount retained from the students, who discontinue the course midway. Moreover, fee forfeited by the appellant in most of the cases, on retention of course fees is already subjected to appropriate service tax (depending upon the type of course). Even if such recoveries are considered as services, since appellant is an educational institution, all services are exempted, as per entry 9 of the Notification No. 25/2012 dated 20.06.2012. Ld. Counsel also produced the Final Order No. 50657/2023 dated 15.05.2023 in the matter of Modi Education Foundation, where it is held that hostel services and education services are na....
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....category of declared service and it amounts to double taxation. The Ld. Counsel relied on the decision of the Moradabad Gas Services (2013 (31) STR 308 (Tri.Del), wherein it is held as under: "Operator paying Service Tax on MRP of SIM-cards and paying commission to distributors out of it - HELD: Collecting Service Tax on MRP of SIM-card from operator and then again on part of amount paid by operator to distributor, puts the parties to these transactions at doubly disadvantageous position - It is case where telecom operator collected money from customers on SIM-cards sold through distributor, paid Service Tax on it, and then paid distributor out of money so collected - Hence, transactions of both parties were essentially one and pay....