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2021 (7) TMI 415 - AT - Service TaxLevy of service tax - Agreeing to the obligation to tolerate the Act - providing maintenance services to the appellant - declared services - whether the Machine Availability clause of agreement dated 17.12.2014 creates the service tax liability upon the appellant? - HELD THAT:- It is clear from the facts that there is no denial on the part of the department, as is apparent from para 4 of the Show cause notice to the fact that the appellant/ service recipient, has already suffered service tax on the invoices raised by M/s. SGSL from time to time. The credit note issued by M/s SGSL, service provider is a refund of excessive amount paid by the appellant on account of defined service to be provided by M/s SGSL. It does not represent any service rendered by the appellant to M/s SGSL so as to attract any service liability of the appellant. The basis of transaction between the parties is the agreement dated 17.12.2014. Perusal thereof makes it abundantly clear that the appellant is service recipient and M/s SGSL is service provider. Hence the payment of service tax can be the liability only and only of M/s. SGSL. The Machine Availability clause in the present case, to my opinion when read with the entire agreement, there is an apparent intent that the terms of agreement shall not be violated and that the service provider shall not compromise with the quality of service else the commercial interest of the appellant shall remain safeguarded in the form of compensation to be paid by M/s. SGSL. Hence, it cannot, by any stretch of imagination, be stated that the recovery of sum by invoking the said clause is the reason behind the execution of agreement for a accrued consideration. The amount received by the appellant in terms of Machine Availability clause, from the service provider with reference to maintenance of WTG due to shortcoming in said service is merely an amount to safeguard the loss of appellant. The said amount cannot be called as consideration for the tolerance of service provided and some lacunae thereof nor it makes the appellant the service provider. Infact once the appellant receives compensation for the downfall in service quality, it is because he is not inclined to tolerate the loss as he may suffer on account of said downfall - The concept of ‘Declared Services’ has therefore been wrongly invoked by the Department and the adjudicating authority below. The findings in order under challenge are not at all sustainable - Appeal allowed.
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