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2021 (11) TMI 427 - CESTAT KOLKATALevy of service tax - tolerance of act of cancellation of coal blocks - operation of a statute or result of an agreement - case of the Revenue is that the appellant is tolerating the act of cancellation and has received this amount as consideration for such tolerance - HELD THAT:- The appellant had no choice of tolerating cancellation or not. The appellant has not chosen to tolerate the cancellation. The cancellation was in pursuance of the order of the Supreme Court and not as a result of a contract to tolerate cancellation. There was no consideration for tolerating the cancellation, only a compensation provided for statutorily for the investment made in the mines by the appellant. Even in cases where any amount is received under a contract as a compensation or liquidated or unliquidated damages, it cannot be termed ‘Consideration’. This case is not even a case of payment under a contract. Both the cancellation of the allocation of the blocks and the receipt of compensation are by operation of law. They are like the receipt of a compensation when one’s land is acquired by the Government in public interest or the payment to a Government employee of an amount equal to the salary for unused leave at the time of his/her retirement - the Government employee has tolerated the non-sanction of leave during his service as per an agreement and in consideration, received the leave encashment at the time of retirement and to charge service tax on the amount received as leave encashment. These, cannot be called taxable services of tolerating a situation by any stretch of imagination. No service tax can be levied on the amounts received by the appellant as compensation. Time Limitation - HELD THAT:- It is not found necessary to examine the question of limitation - all the penalties need to be set aside as well. Appeal allowed - decided in favor of appellant.
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