TMI Blog2021 (6) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... he employer cannot be said to have rendered any service per se much less a taxable service and has merely facilitated the exit of the employee upon imposition of a cost upon him for the sudden exit. Appeal dismissed - decided against Revenue. - ST/12436/2018-DB - A/12265/2021 - Dated:- 25-6-2021 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Present For the Appellant : Shri Sharad Airan, Assistant Commissioner (AR) Present For the Respondent : Shri Willingdon Christian, Advocate ORDER This appeal has been filed by Revenue against the order of Commissioner (Appeals) for dropping of demand of Service Tax. 2. Learned Authorised Representative relied on the arguments made in the Review Order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme of things clearly indicate that the assessee has agreed to tolerate the breach of contract by the employee, if any, against receiving the consideration in the form of one month's pay of the employee. The employee has also agreed to pay such amount in case of breach of contract. After making such agreement, the assessee has offered employment and the employee having agreed to such conditions has accepted the employment. Thus, the element of agreeing to the obligation to tolerate the act of breach of contract of the employee clearly exists in the scheme of arrangement. C. In the instant case, the employee has breached the contract not to leave the employment before the agreed upon period and the assessee has tolerated this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en as per the agreement, the employer is entitled to recover a certain amount from the employee. Learned Counsel argued that the issue is no longer res integra and has been said to rest by Hon ble High Court of Madras in the case of GE T D India Limited2020 (35) G.S.T.L.89 (Mad). He has relied on other numerous case laws as well. 4. We have considered rival submissions. We find that the issue in hand is if Service Tax can be demanded on amount recovered by the employer from the employee for granting waiver of mandatory notice period prescribed in the agreement. The issue has been settled by the Hon ble High Court of Madras in the case of GE T D India Pvt. Ltd. The decision of The Hon ble High Court deals with all the issues raised in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely facilitated the exit of the employee upon imposition of a cost upon him for the sudden exit. The definition in Clause (e) of Section 66E as extracted above is not attracted to the scenario before me as, in my considered view, the employer has not tolerated any act of the employee but has permitted a sudden exit upon being compensated by the employee in this regard. 12 . Though normally, a contract of employment qua an employer and employee has to be read as a whole, there are situations within a contract that constitute rendition of service such as breach of a stipulation of noncompete. Notice pay, in lieu of sudden termination however, does not give rise to the rendition of service either by the employer or the employee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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