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TMI Blog2024 (8) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... the employee for quitting the employment without serving during notice period the said amount is not liable to service tax. In the present case the impugned order is not sustainable - Appeal allowed. - HON BLE MR. RAMESH NAIR , MEMBER ( JUDICIAL ) And HON BLE MR. C. L. MAHAR , MEMBER ( TECHNICAL ) Shri Dhaval Shah , Advocate for the Appellant Shri Anand Kumar , Superintendent ( AR ) for the Respondent ORDER RAMESH NAIR : The issue involved in the present case is that whether the demand of service tax under Section 66E of Finance Act for tolerating an act for the Notice Pay i.e. the amount recovered from an employee for quitting a job before the time period prescribed under an agreement/ job letter is sustainable or otherwise. 2. Shri Dha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble High Court of Madras has held as follows: 10. The provisions of Section 66E(e) appear to have given rise to some ambiguity, on this very issue, clarified by the Central Board of Excise and Customs (C.B.E. C.) in C.B.E. C.s Guidance Notes dated 20-6-2012. At para 2.9.3 the Board states as follows : 2.9 Provision of service by an employee to the employer is outside the ambit of service. 2.9.3. Would amounts received by an employee from the employer on premature termination of contract of employment be chargeable to service tax? No. Such amounts paid by the employer to the employee for premature termination of a contract of employment are treatable as amounts paid in relation to services provided by the employee to the employer in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble High Court of Madras, the appeal is dismissed. (b) The Allahabad Tribunal has taken the same view in the case of Shriram Pistons and Rings Limited which is reproduced below:- After hearing both the sides duly represented by learned advocate Ms. Anshika Agarwal appearing for the appellant and Shri B. K. Jain appearing for the Revenue, we note that in the present case the employer has been served with a show cause notice demanding service tax from that part of the amount which he recovers out of the salary paid to the employee if the employee breaches the contract of total term of employment. From the record, we note that the term of contract between the appellant and his employee are that employee shall be paid salary and the term of e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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