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2022 (9) TMI 1005 - Service Tax
Levy of service tax - charges collected by the appellant towards penalty/late delivery charges - deduction of contractual value - section 66E (e) of the Finance Act, 1994 - appellant is a Central Government Public Sector Undertaking - HELD THAT:- This issue as to whether the amount collected towards liquidated charges can be subjected to service tax under section 66E (e) of the Finance Act has been decided by a Division Bench of the Tribunal in M/s South Eastern Coal Fields Ltd. Vs. Commissioner of Central Excise And Service Tax, Raipur [2020 (12) TMI 912 - CESTAT NEW DELHI] which was subsequently followed by the Tribunal in M.P. Poorva Kshetra Vidyut Vitran Co. Ltd. Vs. Principal Commissioner, CGST And Central Excise, Bhopal [2021 (2) TMI 821 - CESTAT NEW DELHI], where it was held that It is, therefore, not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the appellant towards “consideration” for “tolerating an act” leviable to service tax under section 66E(e) of the Finance Act.
The liquidated damages collected by the appellant as penalty/late delivery charges cannot be subjected to service tax under section 66E (e) of the Finance Act.
Appeal allowed - decided in favor of appellant.