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TMI Blog2023 (10) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... h would be subjected to service tax under section 66E(e) of the Finance Act. As the issue in the present Appeal is identical, the impugned OIO set aside - appeal allowed. - MR. R. MURALIDHAR, MEMBER (JUDICIAL) AND MR. K. ANPAZHAKAN, MEMBER (TECHNICAL) Ms Udita Saraf Mr. Deepro Sen, both Advocate for the Appellant Mr. Joydip Chattoapdhyay, Authorized Representative for the Respondent ORDER The Appellant is before us being agitated by the confirmed Service Tax demand on the liquidated damages received by them from their clients. 2. The Learned Counsel submits that the issue is no more res integra and draws our attention to this Bench decision in the case of Brahmaputra Crackers and Polymer Ltd. V. Commr. of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peared to be taxable as a declared services under Section 66E(e) of the Finance Act. The Principal Commissioner, however, did not accept the contention advanced on behalf of the Appellant and confirmed the demand of service tax holding that the amount received by the said appellant towards penalty, earnest money deposit forfeiture and liquidated damages would tantamount to a consideration for tolerating an act on the part of the buyers of coal/contractors, for which service tax would be levied under section 66 E(e) of the Finance Act. The Tribunal rejected the contentions advanced on behalf of the Department that penalty amount, forfeiture of earnest money deposit and liquidated damages had been received by the said appellant towards c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 68 at the rate specified in section 66B. Likewise, there can be services conceived in agreements in relation to the other two activities referred to in section 66E(e). 27. It is trite that an agreement has to be read as a whole so as to gather the intention of the parties. The intention of the appellant and the parties was for supply of coal; for supply of goods; and for availing various types of services. The consideration contemplated under the agreements was for such supply of coal, materials or for availing various types of services. The intention of the parties certainly 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 safegu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an agreement that A would not supply coal to the appellant provided B paid some amount to it, then in such a case, it can be said that the activity may result in a deemed service contemplated under section 66E (e). 30. 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. 7. This decision of the Tribunal in South Eastern Coalfields was followed by the Tribunal in M.P. Poorva Kshetra Vidyut Vitran. 8. In view of the aforesaid decisions of the Tribunal, it is not possible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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