9911796707
TMI Blog2021 (6) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... ase revolves around the fact that the assessee has offered employment to their employees on the terms and conditions as decided upon by both the parties. One of the condition to offering and accepting the employment is to continue in employment for the prescribed period and in case of premature resignation or leaving the employment the employee would have to pay to the assessee the decided amount i.e. one month's pay. In a nutshell, the contractual agreement to offering the employment is that the employee should not leave the employment before the prescribed period. It is upon agreeing to this condition that the employment is offered. In case of breach of this condition by the employee, he would be required to pay one month's salary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the breach of contract, the assessee has received consideration in the form of one month's pay of the employee. Thus, the activity clearly falls within the ambit of declared services in terms of the provisions of Sec. 66E(e) of the Finance Act, 1994. Therefore, the assessee had correctly paid the service tax on such 'noticepay' amount received as consideration towards tolerating the act of breach of contract by the employee. Resultantly no refund was admissible to the assessee in as much as the service tax had been correctly paid by them. D. The Commissioner (Appeals) has failed to appreciate the term 'declared service under Sec. 66E(e) of the Finance Act, 1994 in terms of the facts of the case such as the contractual agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provisions of Section 66E(e) appear to have given rise to some ambiguity, on this very issue, clarified by the Central Board of Excise and Customs (C.B.E. & C.) in C.B.E. & C.s' Guidance Notes dated 20-6-2012. At para 2.9.3 the Board states as follows : 2.9 Provision of service by an employee to the employer is outside the ambit of service. 2.9.3. Would amounts received by an employee from the employer on premature termination of contract of employment be chargable to service tax? No. Such amounts paid by the employer to the employee for premature termination of a contract of employment are treatable as amounts paid in relation to services provided by the employee to the employer in the course of employment. Hence, amounts so pai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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