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TMI Blog2023 (6) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... ER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [ 2020 (12) TMI 912 - CESTAT NEW DELHI] was relied by the Tribunal. It has been observed therein that there is a distinction between a consideration under a contract and the compensation for failure to fulfill the contract . It has also been held that while the consideration is paid for doing something by one party at the desire of the other party and is thus the result of the performance of the contract whereas, on the other hand, compensation or damages is paid when one party fails to perform his part and is thus the result of frustration of contract and/or not performing the contract. In the present case, the appellant had paid the entire purchase price to the sellers who were in turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant appeal has been preferred by the assessee, M/s. M. N. Dastur Co. Pvt Ltd, assailing Order-in-Original dated 26.10.2016 whereby the Ld. Commissioner, Service Tax, Kolkata, has confirmed demand of service tax of Rs. 74,46,900/- and imposed equivalent penalty for the period from July 2012 to March 2013. The said demand has been raised under the category of Declared Service under Section 66E(e) of the Finance Act 1994, on the amount received by the Appellant in excess of the purchase price paid for the immovable property, subsequent to cancellation of the agreement to Sale of the said property. 2. Briefly stated, the facts of the case are that the Appellant had entered into two agreements with M/s. Panyam Cements and Mineral Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid at the time of agreement to sell. The contention of the Revenue is that the Appellant has agreed to an obligation to refrain from an act i.e. execution of the initial agreement, and/or agreeing to an obligation to tolerate an act, done by the first party i.e. delaying in execution of the initial agreements by agreeing to cancel the initial agreements in lieu of compensation amount; and thus the receipt of said compensation will be covered as a declared service under Section 66E(e) of the Act. 3. Sri Sanjay Dixit and Sri Amit Jain, both CA and Sri Rajeev Agarwal, Advocate appeared for the appellant and Sri J. Chattopadhyay, Ld. A/R appeared for the Revenue. 4. The Counsel appearing for the appellant submits that the intention of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the case records. The issue to be decided in this case is whether cancellation of the Agreement to Sell and subsequent excess amount received over and above the payment made by the appellant for purchase of the immovable property is a consideration against declared service as per Section 66E(e) of the Finance Act, introduced w.e.f. 1 st July 2012. We find that the provisions contained in Section 66E(e) has been elaborately dealt by the co-ordinate Bench of the Tribunal in the case of M/s Madhya Pradesh Poorva Kshetra Vidyut Vitaran Company Limited (Supra), wherein the judgment in the case of South Eastern Coalfields Ltd. v Commissioner of Central Excise and Service Tax, Raipur, Service Tax Appeal No. 50567 of 2019 decided by Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant had paid the entire purchase price to the sellers who were in turn duty bound to carry out the development of the property within a reasonable period of time and immediately thereafter execute the Sale Deed in favour of the appellant. However, they failed to perform their part of the obligation. The appellant came to know that an out of court settlement has been reached between the disputing sellers and developers whereby the Confirming Party in terms of the compromise may assign its rights to the Developer. The appellant agreed to cancel the two agreements for a lump-sum payment, a portion of which was compensation, which can at best be said to be for the damages/compensation of loss of interest on funds invested solely due t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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