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TMI Blog2023 (12) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... IGAM LTD. VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX, CUSTOMS AND CENTRAL EXCISE, JODHPUR I [ 2022 (1) TMI 909 - CESTAT NEW DELHI] , this Tribunal held compensation for failure under a cannot is NOT consideration for service under the contract and also following the law laid down by Madras High Court in GE T D that Notice pay, in lieu of termination, however, does not give rise to the rendition of service either by the employer or the employee, the impugned order upholding confirmation of a demand of service tax on the notice pay received/recovered by the appellant from its employees for premature resignation cannot be sustained. The issue involved in the present appeal is found to be exactly same which stands already decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 2014-15 vide SCN dated 19.04.2016 + Rs. 1,09,66,554/- for period 2015-16 vide SCN dated 17.04.2018 (b) Non-payment of Service tax on Notice Pay recovered from the ex-employees (Service Tax Rs. 3,38,472/- for period 2010-11 to 2014-15 vide SCN dated 19.04.2016 + Rs. 2,90,857/- for period 2015-16 vide SCN dated 17.04.2018. 3. Proportionate interest and appropriate penalties were also proposed vide both the said show cause notices. The Adjudicating Authority vide the aforesaid orders has dropped the major amount of demand i.e. for Rs. 4,59,47,462/- (Rs. 3,53,59,075 + Rs. 1,09,66,554), which was the amount received in respect of revenue sharing agreement, however, the demand for an amount of Rs. 6,29,329/- (Rs. 3,38,472 + Rs. 2,90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the employment. The issues stand already decided by this Tribunal, Principal Bench vide order dated 14.01.2022 in Appeal No. 53020 of 2018 title as M/s Rajasthan Rajya Vidhyut Prasaran Nigam Ltd. versus Commissioner of Central Goods and Service Tax, Customs and Central Excise, Jodhpur I, this Tribunal held as follows :- 15. The present case deals with contracts of employment. Employment contracts are entered into with the expectation that the employer will continue to keep him employed for the period as agreed and that the employee will perform his duties diligently. They are not entered into so that the employer can remove the employer from service or so that the employee can resign and leave the service. However, often, for various r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts paid in relation to services provided by the employee to the employer in the course of employment. Hence, amounts so paid would not be chargeable to service tax. However any amount paid for not joining a competing business would be liable to be taxed being paid for providing the service of forbearance to act. 17. Referring to the above clarification by the CBEC, High Court of Madras has, in GE T D India Ltd. [ 2019 (12) TMI 1566 Madras High Court ] held that notice pay, in lieu of sudden termination, does not give rise to the rendition of service either by the employer or the employee and allowed the writ petitions. Thus, the specific issue in this case is no longer res integra. GE T D India Ltd. was followed in Intas Pharm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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