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TMI Blog2020 (1) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... facturer M/s Parle Biscuits Pvt. Ltd., in terms of the agreement entered between the two. M/s Parle is procuring the raw material and supplying the same to the appellant for manufacture of the confectionaries, which were being cleared by the appellant on payment of Excise duty on MRP as declared by M/s Parle. 2. M/s Parle is making payment of job charges to the appellant on per kilo basis of confectionary as agreed upon between the two. However in case the quantum of goods got manufactured by M/s Parle is less than standard mutually agreed upon quantum, the appellants are entitled ex-gratia job charges to cover up the loss or deficiencies in normal job charges to be received by the appellant. The quantum of ex-gratia to be given to the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly manufacturing confectionaries for and on behalf of the M/s Parle and is clearing the same upon payment of Central Excise duty on the basis of MRP declared by M/s Parle. It is only in situation when the appellant's capacity, as a manufacturer, is not being fully utilized by M/s Parle, their claim of ex-gratia charges arises so as to compensate them from the financial damage/injury. As such, ex-gratia amount is not fixed and is mutually decided between the two, based upon the terms and conditions of the agreement and is in the nature of compensation in case of low/less utilization of the production capacity of the assessee. The Lower Authorities have invoked the provision of the Section 66E (e) of the Act which relates to the definition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cause some damage or loss to the appellant, the contract itself provides for compensation to make good the possible damages owning to delay, or breach, as the case may be, by way of payment of liquidated damages by the contractor to the appellant. As such, the contracts provide for an eventuality which was uncertain and also corresponding consequence or remedy if that eventuality occurs. As such the present ex-gratia charges made by the M/s Parle to the appellant were towards making good the damages, losses or injuries arising from "unintended" events and does not emanate from any obligation on the part of any of the parties to tolerate an act or a situation and cannot be considered to be the payments for any services. 5. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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