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2022 (5) TMI 254 - AT - Service TaxLevy of service tax - Consideration for tolerating the act of cancellation of the coal blocks by the Ministry of Commerce, Government of India - HELD THAT:- The question of tolerating something and receiving a compensation for such tolerance pre-supposes that: a) the person had a choice to tolerate or not; b) the person chose to tolerate; c) such tolerance was for a consideration as per an agreement (written or otherwise) to tolerate; d) the tolerance was a taxable service. None of the above elements are present in the case under consideration. 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 Hon’ble 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. It is unthinkable to say that the land-owner has tolerated the acquisition of his land as per an agreement and charge Service Tax on the compensation - No Service Tax can be levied on the amounts received by the Appellant as compensation. Since the matter is decided in favour of the Appellant on merits, it is not found necessary to examine the question of limitation. Appeal allowed - decided in favor of appellant.
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