Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2022 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 1010 - AT - Service TaxLevy of service tax - declared services - Berth Reservation Scheme, to accord priority berthing of specified users in the Port - penalty by way of encashment of Bank Guarantee for the equivalent wharfage in respect of the shortfall quantity of the MGT - HELD THAT:- Tribunal in the case of M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI] has examined in detail the provisions of Declared Service under Section 66E(e) of the Finance Act, 1994, which was introduced in the Negative List based regime effective from 01.07.2012 - In the said case, the issue for consideration before the Tribunal was whether the assessee company was liable to pay service tax on the liquidated damages and penalty / forfeiture of earnest money deposit for recovery of amount due to non fulfilment of contractual agreement by one of the parties to the agreement. The Tribunal came to a conclusion that by collecting the penal amount as aforesaid, it is not the intention of the assessee to tolerate the non performance of the obligation which was cast upon him as per the commercial contract entered by the assessee with the other party. The decision of the Tribunal is squarely applicable in the instant case also wherein the amount collected by the appellant by encashment of Bank Guarantee for the shortfall of the quantity as against the Minimum Guarantee Tonnage (MGT) as per the scheme cannot be said towards tolerating any act or a situation on the part of the appellant and thus, there is no rendition of Declared Service under Section 66E(e) by the appellant. The impugned demand cannot be sustained and is thus set aside. Penalty imposed on the appellant is also set aside - Appeal allowed - decided in favor of appellant.
|