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2019 (7) TMI 500 - AT - Service TaxDemand of service tax on penalty - penalty which is deducted from the supplier/contractor’s bill and on encashment of bank guarantee of defaulters/ suppliers - scope of Section 66E(e) of the Finance Act - HELD THAT:- The said amount of penalty in question is part of the net amount, after deduction of service tax and other applicable tax from the gross amount. Further, the service tax is a destination based tax and the amount is taxable only once - Thus, admittedly, when the amount is already taxed and it is part of the taxed amount, being deducted from the bill, by way of penalty and reflected by the appellant under the head “Miscellaneous Income not pertaining to Revenue”. The said amount cannot be again subjected to service tax on this score alone. Further, this amount is not for any service to be rendered under Section 66E(e) of the Finance Act. The service tax and penalty retained by the Commissioner (Appeals) is set aside - appeal allowed - decided in favor of appellant.
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