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TMI Blog2024 (7) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... UT PRASARAN NIGAM LTD. VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX, CUSTOMS AND CENTRAL EXCISE, JODHPUR I [ 2022 (1) TMI 909 - CESTAT NEW DELHI] , where it was held that ' 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 and needs to be set aside.' Considering the above facts, the amounts receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015, appellant has not paid service Tax on such amounts collected from employees. Thereafter, show cause notice was issued demanding service tax with interest and invoked the penal provisions under various provisions of law. The Adjudication Authority confirmed the demands and imposed penalties. 3. Aggrieved by the said orders, appeals were filed before the Commissioner (Appeals), who in the impugned order in Appeal No. ST/20116/2020 confirmed the demand along with interest and modified the penalty imposed on the appellant. Further, the Commissioner (Appeals) in the impugned order in Appeal No. ST/20548/2019 confirmed the demand along with interest and penalty. Aggrieved by impugned orders, the present appeals are filed. Since the issue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Tribunal in the matter of M/s. Rajasthan Rajya Vidhyut Prasaran Nigam Ltd. Vs. Commissioner, 2022 (1) TMI 909 CESTAT NEW DELHI, wherein following the judgment of GE T D India Ltd. Vs. Deputy Commissioner of Central Excise, Chennai - 2020 (1) TMI 1096 - MADRAS HIGH COURT, it waws held that; 19. In view of our finding that 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue reiterated the findings and further submits that there is a contract between the appellant and its employees at the time of the employment that if the employee terminates the employment certain consideration has to be paid by the employee to the employer. Thus, the activities are passive in nature, on a harmonious reading of section 65(b) and 66E(e) of the Finance Act, 1994 make it clear that nature of service can be both active and passive. 9. Heard both sides, we find that the issue is settled as per the Circular No. 214/1/2023-Service Tax dated 28.02.2023 and the decision in the matter of M/s. Rajasthan Rajya Vidhyut Prasaran Nigam Ltd (Supra). Considering the above facts, the amounts received by the appellant from the employees, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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