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2024 (5) TMI 1058 - AT - Service TaxLevy of service tax - Liquidated damages in the contracts towards penalty/late delivery charges - section 66E (e) of the Finance Act 1994 - applicability of circular issued by the Department of Revenue - appellant is a Central Government Public Sector Undertaking - HELD THAT - Ld. Chartered Accountant further submitted that the Department of Revenue has recently issued Circular No. 178/10/2022-GST dated 3rd August 2022 in which they have clarified that there is no liability of payment of Service Tax/GST on liquidation damages charged by the company. We find that identical issue in the appellant s own case has been decided by various Benches of Tribunal and which has consistently held that liquidated damages collected by the appellant as penalty/late delivery charges cannot be subjected to service tax u/s 66E (e) of the Finance Act. In this regard we may refer the Final Order 2023 (4) TMI 54 - CESTAT NEW DELHI passed by the Principal Bench in the appellant s own case where identical issue was involved. Thus we are of the considered view that the impugned order is not sustainable in law therefore we set aside the impugned order by allowing the appeal of the appellant with consequential relief if any as per law.
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