TaxTMI 
TaxTMI 
2026 (10) TMI 641
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....assed by the Ld. Commissioner(Appeals) who upheld the Order-in- Original passed by the lower authority. The lower authority vide his Order-In-Original No. 64/Addl. Commr./ST/GHY/2021-22 Dated: 02.03.2022 has confirmed the demand of service tax including cesses amounting to Rs. 1,08,29,117/- for the Financial Year 2015-16 along with interest. He has also imposed penalties of Rs. 1,08,29,117/ under section 78(1) of the said Finance Act; penalty of Rs. 10,000/ under section 77(1)(a) of the said Act and Penalty under section 77(2) of the said Act has also been imposed, for violation of provisions under section 70 of the said Act. 2. The submissions made by the Appellant in their Grounds of appeal are summarized as under: (i) They ha....
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....pugned order, realization of small amount from the transporters has been described as compensation or liquidated damages under section 74 of the Indian Contract Act, 1872. Such realization of penalty is part of the amount which has been considered to arrive at the taxable value for payment of service tax by the Appellant and so service tax cannot be demanded again on the same amount. (iv) In support of the above contention, the Appellant relied on the decision of the Hon'ble CESTAT, Principal Bench in the case of ACCOUNTS OFFICER, MADHYA PRADESH KSHETRA VIDYUT VITRAN COMPANY LTD. versus COMMR. OF CGST, CUS. & C. EX., BHOPAL reported 2019 (29) G.S.T.L. 734 (Tri. - Del.) (v) The Appellant also relied on the following decisio....
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....be considered as 'consideration' for rendering of any service. However, the department has demanded service tax by treating the said activity as 'Declared Service'. 5.1. 'Declared Service' has been defined under section 66E(e) of the Finance Act as under: "(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act;" 5.2. We observe that the freight and the amount realized from the transporters are related to services by way of transportation of goods. It is not relating to 'tolerating an act' of the transporter. We find that the services provided other than goods transport agency and courier agency is falling under negative service as stipulated under section 66D(p) of the sai....
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....- Del.) 5.4. We find that the realization of small amount for loss suffered by the Appellant on account of failure by the transporters to deliver the actual quantity of cement to the consignees as penalty or compensation as liquidated damages. Such amount collected by the Appellant from the Transporters cannot be considered service and service tax cannot be collected by treating the same as 'Declared Service', as held by the Tribunal in the case of Airport Authority of India v, Commissioner of Service Tax, Delhi reported in 2015 (39) S.T.R. 35 (Tri. - Del.) 5.5. In the case of Amit Metaliks Limited v. Commissioner of CGST, Bolpur reported in 2020 (41) G.S.T.L. 325 (Tri. - Kolkata), the Tribunal has held in para 27 of the order as unde....
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....han Das [AIR 1963 SC 1405]. 5.8. In the case of SAIL v. Commr. of GST & C. Ex., Salem reported in 02155) G.S.T.L.34Tri. - Chennai), the Tribunal has held that amount collected towards penalty, earnest money deposit forfeiture and liquidated damages cannot be said to be towards any service per se, since neither appellant is carrying on any activity to receive compensation nor can there be any intention of other party to breach or violate contract and suffer a loss - Service Tax not leviable under Section 65B, read with Section 66E(e) of Finance Act, 1994. 5.9. In the case of Neyveli Lignite Corporation Ltd. v. Commr. of Customs, C.Ex., & S.T., Chennai reported in 021(53)G.S.T.L. 401(Tri.- Chennai), the Tribunal has held that amount rec....