TaxTMI 
TaxTMI 
2025 (10) TMI 452
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....a Show Cause Notice No. 44/2018 dated 16.05.2019 was served upon the appellant proposing recovery of service tax amounting to Rs. 14,96,777/- along with interest and the appropriate penalties. The original Adjudicating Authority had confirmed the proposal vide Order-in-Original No. 21/2020 dated 07.09.2020. Appeal against the said order has been rejected by the Commissioner (Appeals) vide Order-in-Appeal No. 37/(CRM)ST/JDR/2021 dated 09.02.2021. Being aggrieved, the appellant is before this Tribunal. 3. We have heard the learned counsel for the appellant and the learned Authorized Representative for the Department. 4. Learned counsel for the appellant submitted that the demand of service tax has been confirmed vis-a-vis penal charges recovered by the appellant on account of breach or non-performance of contract. The issue is no longer res-integra that such an amount is not the consideration in lieu of any service, hence, is not subject to service tax. Decision in the case of South-Eastern Coalfields Limited vs. Commissioner of Central Excise and Service Tax reported as 2021 (55) GSTL 549 (Tri.-Del.), is relied upon. Several earlier decisions of this Tribunal in appellant's ow....
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....any other manner; or (ii) (ii) Such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of article 366 of the Constitution; or (iii) A transaction in money or actionable claim; (b) A provision of service by an employee to the employer in the course of or in relation to his employment; (c) Fees taken in any Court or tribunal established under any law for the time being in force. Also whenever service tax is chargeable on aforementioned any activity, such value has to be determined in terms of Section 67 of the Act. From the perusing of the said section, it becomes abundantly clear that only an amount i.e. payable for taxable service will be considered as "consideration". The meaning of terms "consideration" has been elaborated by the larger bench of the Tribunal in the case of Commissioner of Service Tax vs. M/s Bhayana Builders reported as 2018 (2) TMI 1325 which has affirmed by the Hon'ble Supreme Court in the decisions cited as 2018 (10) GSTL 118 (S.C.) wherein it was held as follows:- "The amount charged should be for "for such service provided: Section 67 clearly indic....
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....ons have been referred to and it has been held as follows:- "8. We have also perused the decisions relied upon by the appellant. We observe that this Tribunal in the case of South Eastern Coal Fields Ltd. vs. CCE & ST, Raipur reported in 2021 (55) GSTL 549 has considered the same issue as above. It has already been held as follows:- "There is marked distinction between "conditions to a contract" and "considerations for the contract". A service recipient may be required to fulfill certain conditions contained in the contract but that would not necessarily mean that this value would form part of the value of taxable services that are provided. Hence, payment of the impugned 'compensation charges' in the present case merely amounts to fulfillment of the condition envisaged in Para No. 6.5.3 of the Agreement dated 12-7-2011 and not consideration for the said contract [Agreement dated 12-7-2011]. 12. 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 c....
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.... 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. (v) M/s. M.P. Poorva Kshetra Vidyut Vitran Co. Ltd. v. Principal Commissioner CGST and CE, Bhopal [2021 (2) TMI 821]/2021 (46) G.S.T.L. 409 (Tri. - Del.), wherein the ratio of the decision in the case of M/s. South Eastern Coalfields (supra) was followed and the order confirming the demand of Service Tax on the amount collected towards liquidated damages and theft of electricity was set aside." 9. From the perusal of these decisions it becomes abundantly clear that the issue of considering a forfeited amount as an amount of consideration towards declared services stands already settled in favour of the assessee. The same is already held to not to be the consideration towards rendering declared service defined under section....