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2023 (12) TMI 310 - CESTAT NEW DELHIDeclared service - amount shown as miscellaneous income and receipts under head the “balance written back” in the balance sheet of 2016-17 - Department formed an opinion that the appellants have tolerated the situation and thus are covered under the ambit and scope of declared service as provided under section 66E (e) of the Finance Act, 1994 - levy of penalty - HELD THAT:- The appellant has not agreed to tolerate an act or a situation nor has agreed to the obligation to refrain from any act. What has been agreed by the appellant is, commitment of performance towards the machines supplied by them in case those perform subdued as per the standard committed performance. The alleged tolerance, in the given circumstances, is possible on the part of the receiver of machines. Hence, the question of tolerating any act by the appellant does not at all arise. The Appellant, therefore, cannot be held liable for rendering any declared service as defined under section 66E (e) of Finance Act, 1994. The findings to that extent of order under challenge are therefore, not sustainable and are thus liable to be set aside. Levy of penalty - HELD THAT:- It is held that the admitted facts on record and the findings above are sufficient to hold that there is no liability of payment any service tax on the part of the appellant, the question of evasion, thereof, does not at all arises. Penalty is, therefore, not imposable upon the appellant. The presence of any malafide intent to evade becomes irrelevant in the given scenario. Thus, there is neither any legal basis nor factual with the adjudicating authorities to penalize the appellant. Resultantly, the order imposing penalty is also held liable to be set aside. Appeal allowed.
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