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TMI Blog2023 (8) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... N COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [ 2020 (12) TMI 912 - CESTAT NEW DELHI] and the Circular dated 28.02.2023 - In the said case it was held that The activities, therefore, that are contemplated under Section 66E(e), when one party agrees to refrain from an act, or to tolerate an act or a situation, or to do an act, are activities where the agreement specifically refers to such an activity and there is a flow of consideration for this activity. The order dated 04.10.17 passed by the Commissioner (Appeals) cannot, therefore, be sustained and is set aside - The appeal is, accordingly, allowed. - HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT AND HON'BLE MS. HEMAMBIKA R. PRIYA, MEMBER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Customs and, therefore, the order deserves to be set aside. 5. Learned Authorised Representative appearing for the department has supported the impugned order. 6. Learned counsel for the appellant is justified in submitting that the issue stands covered by the Division Bench judgment of the Tribunal in M/s South Eastern Coal Fields. The Division Bench observed as follows: 25. It is in the light of what has been stated above that the provisions of Section 66E(e) have to be analyzed. Section 65B(44) defines service to mean any activity carried out by a person for another for consideration and includes a declared service. One of the declared services contemplated under Section 66E is a service contemplated under clause (e) which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inly was not for flouting the terms of the agreement so that the penal clauses get attracted. The penal clauses are in the nature of providing a safeguard to the commercial interest of the appellant and it cannot, by any stretch of imagination, be said that recovering any sum by invoking the penalty clauses is the reason behind the execution of the contract for an agreed consideration. It is not the intention of the appellant to impose any penalty upon the other party nor is it the intention of the other party to get penalized. 28. It also needs to be noted that Section 65B(44) defines service to mean any activity carried out by a person for another for consideration. Explanation (a) to Section 67 provides that consideration incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... breach of contract, forfeiture of salary or payment of bond amount in the event of the employee leaving the employment before the minimum agreed period and similar other issues arising out of clause (e) of section 66E of the Finance Act, 1994. Reference has also been invited to Circular No. 178/10/2022-GST dated 3 rd August, 2022 regarding applicability of GST on liquidated damages, compensation and penalty arising out of breach of contract or other provisions of law, and its applicability to service tax related issues. 2. It may be seen that Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act is a Declared Service as per clause (e) of section 66E of the Finance Act, 1994. A se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I/62066/2023 own right. There must be a necessary and sufficient nexus between the supply (i.e. agreement to do or to abstain from doing something) and the consideration. 5. The issue also came up in the CESTAT in Appeal No. ST/ 50080 of 2019 in the case of M/s Dy. GM (Finance) Bharat Heavy Electricals Ltd in which the Hon ble Tribunal relied on the judgement of divisional bench in case of M/s South Eastern Coal Fields Ltd Vs. CCE Raipur {2021(55) G.S.T.L 549(Tri-Del)}. Board has decided not to file appeal against the CESTAT order ST/A/50879/2022-CU[DB] dated 20.09.2022 in this case and also against Order A/85713/2022 dated 12.8.2022 in case of M/s Western Coalfields Ltd. Further, Board has decided not to pursue the Civil Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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