9911796707
TMI Blog2022 (5) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... ared service , as defined in Section 65B (22) are not applicable for consideration of such activity as a service for the purpose of levy of service tax. Further, the amount received as compensation by the appellants cannot be equated with the term consideration inasmuch as the latter is received for performance under the contract; whereas, the former is received, if the other party fails to perform as per the contractual norms. The Hon ble Madras High Court in the case of GE T D INDIA LIMITED (FORMERLY ALSTOM T D INDIA LIMITED) VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE [ 2020 (1) TMI 1096 - MADRAS HIGH COURT] has held that in absence of rendition of any taxable service, the amount received as consideration cannot be termed as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 26/03/2018, wherein service tax demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 service ina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 resign ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
