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TMI Blog2022 (5) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... certain amount as 'Notice Period Pay' or 'Bond Enforcement Amount' from their employees, who want to quit the job without notice or do not serve the organization for the prescribed period as per terms of the employment contract. During the course of audit of records maintained by the appellants, it was observed by the Department that the appellants did not pay service tax on the consideration received on account of 'notice pay' from the employees. The Department had interpreted that the said activity of the appellant is covered under the declared service, defined under Section 66E (e) of the Finance Act, 1994. Accordingly, show-cause proceedings were initiated against the appellants, which culminated into the adjudication order dated 26/03/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the judicial forums: a. GE T & D India Limited (Formerly ALSTOM T & D India Limited) Vs. Deputy Commissioner of Central Excise - 2020 (1) TMI 1096-Madras High Court b. C.S.T.-Service Tax-Ahmedabad Vs. Intas Pharmaceuticals - 2021 (6) TMI 906 - CESTAT Ahmedabad c. M/s. Rajasthan Rajya Vidhyut Prasaran Nigam Ltd. Vs. Commissioner of Central Goods and Services Tax, Customs and Central Excise, Jodhpur I - 2022 (1) TMI 909 - CESTAT New Delhi 4. On the other hand, the learned AR appearing for Revenue reiterated the findings recorded in the impugned order. 5. Heard both sides and perused the records. 6. The term 'notice pay' mentioned in the employment contract cannot be considered as a service, more specifically as the taxable se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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." 7. Further, we also find that by relying upon the above judgment of Hon'ble Madras High Court, this Tribunal in the case of M/s Intas Pharmaceuticals (supra) and M/s Rajasthan Vidhyut Prasaran Nigam Ltd. (supra) has held that any compensation paid by the employee to the employer for r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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