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2023 (4) TMI 54 - AT - Service TaxLevy of Service Tax - declared services or not - charging and recovering liquidated damages on account of delay in supply contract and service contract as per written agreement with their supplier - applicability of Circular dated 3.08.2022 - HELD THAT:- This issue is no more res integra. This Tribunal in the case of Steel Authority of India Ltd. [2021 (7) TMI 1092 - CESTAT CHENNAI] has held activities, therefore, that are contemplated under section 66E(e), when one party agrees to refrain from an act, or to tolerate an act or a situation, or to do an act, are activities where the agreement specifically refers to such an activity and there is a flow of consideration for this activity. The decision rendered in appellants’ own case vide Final Order No. 50879/2022 dated 20.09.2022 in Service Tax Appeal No. 50080 of 2019 [2022 (9) TMI 1005 - CESTAT NEW DELHI], however for Bhopal unit with respect to ‘goods and transport service’, is also about the same issue holding the receiving liquidated damages due to violation of terms of contract does not amount to any such act as may be called as declared service. The amount cannot be made liable to tax in the name of it being consideration for providing deemed service. Demand set aside - appeal allowed.
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