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TMI Blog2025 (5) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... interest and penalty. 2. Two issues arise for consideration in this appeal namely: i. Admissibility of CENVAT credit of service tax paid on goods transport agency [GTA] services availed for outward transportation of goods from the factory gate/depot of the appellant to the premises of the customer under rule 2(1) of the 2004 Credit Rules. ii. Demand of service tax on "fine/penalties, retention money and liquidated damages", against delayed completion of works or non-performance of contract under section 66E(e) of the Finance Act. 3. The appellant is engaged in the manufacture of Silver Ingot, Zinc Ingot and Lead Ingot and avails CENVAT credit on inputs, capital goods and input services under the provisions of the 2004 Credit Rules. 4. During the period from July 2016 till June 2017, the appellant claims that it sold the final product to its customers on Free on Road [FOR] destination basis, and consequently remained responsible for getting the goods delivered to the premises of the buyer; the appellant also bore the risk of loss while the goods were in transit; and the sale took place at the premises of the customers. The appellant availed the services of GTA for such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided on 18.04.2024; ii) The amount collected as "liquidated damages/retention money/fines and penalties" from the parties to the contract for breach or non-performance is not towards provision of any service and so would not be susceptible to service tax. To support this contention, learned counsel placed reliance upon a decision of the Tribunal in South Eastern Coalfields Ltd vs Commissioner of Central Excise & S.T., Raipur- 2021 (55)G.S.T.L. 549(Tri-Del.) and the Circular dated 03.08.2022 issued by the department; iii) The extended period of limitation could not have been invoked and so the impugned order deserves to be set aside since the entire demand is covered by extended period; and iv) Imposition of penalty and recovery of interest is not sustainable. 10. Shri S.K. Ray, learned authorised representative appearing for the department has, however, supported the impugned order and submitted that it does not call for any interference in this appeal. 11. The submissions advanced by the learned counsel for the appellant and the learned authorised representative appearing for the department have been considered. 12. Regarding the first issue relating to admissibil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change brought about by the amendment made in rule 2(l) of the 2004 Rules on 01.03.2008. This is how the Larger Benches of the Tribunal in The Ramco Cements and Sweety Industries vs. Commissioner of CGST & Central Excise- Excise Appeal No. 12738 of 2018 decided on 14.02.2024 also interpreted the decision of the Supreme Court in Ultra Tech Cement. 30. Paragraph 27 of the decision of the Tribunal in The Ramco Cements is reproduced below: "27. Applying the said principle to the present circumstances, it is seen that the Supreme Court, though in paragraph 13 observed that CENVAT credit on Goods Transport Agency availed for transport of goods from place of removal to buyers' premises was not admissible, but the principles in ascertaining the place of removal in the context of admissibility of CENVAT credit on GTA Services have not been laid down, as was also submitted by the learned counsel for the appellant. The said issue has been left open to be decided on the facts of each case." 31. In Sweety Industries the Larger Bench of the Tribunal observed as follows: "38. A perusal of the aforesaid judgment of the Supreme Court in Ultra Tech Cement would indicate that the&n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m one person to another when one person agrees to the obligation to refrain from an act, or to tolerate an act, or a situation, or to do an act. In other words, the agreement should not only specify the activity to be carried out by a person for another person but should specify the: (i) consideration for agreeing to the obligation to refrain from an act; or (ii) consideration for agreeing to tolerate an act or a situation; or (iii) consideration to do an act. 26. Thus, a service conceived in an agreement where one person, for a consideration, agrees to an obligation to refrain from an act, would be a 'declared service' under section 66E(e) read with section 65B (44) and would be taxable under section 68 at the rate specified in section 66B. Likewise, there can be services conceived in agreements in relation to the other two activities referred to in section 66E(e). 27. It is trite that an agreement has to be read as a whole so as to gather the intention of the parties. The intention of the appellant and the parties was for supply of coal; for supply of goods; and for availing various types of services. The consideration contemplated under the agreements was for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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