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TMI Blog2024 (11) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... held the employer cannot be said to have rendered any service per se much less a taxable service and has merely facilitated the exit of the employee upon imposition of a cost upon him for the sudden exit. The definition in clause (e) of Section 66E is not attracted as the employer has not 'tolerated' any act of the employee but has permitted a sudden exit upon being compensated by the employee in this regard. Though normally, a contract of employment qua an employer and employee has to be read as a whole, there are situations within a contract that constitute rendition of service such as breach of a stipulation of noncompete. Notice pay, in lieu of sudden termination however, does not give rise to the rendition of service either by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. as well as decisions of the Hon'ble High Court of Madras in E T D India Limited v. Deputy Commissioner of Central Excise, Chennai [2020 (35) GSTL 89 (Mad)] and that of the Tribunal in HCL Learning Ltd v. Commissioner of Central Goods and Service Tax, Noida [2019-TIOL-3545-CESTAT-ALLAHABAD] and in State Street Syntel Services Pvt Ltd v. Commissioner of CGST, Navi Mumbai [2021-TIOL-152-CESTAT-MUM] besides orders of two other Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt of Madras, as well as of the Tribunal, that guided the lower authorities in not accepting the proposals in the show cause notice. 5. Not only do we find that the reviewing authority has inappropriately chosen to discard the guide brought out by the Central Board of Excise and Customs (CBEC) but also that the litigation policy which precluded appeal against the decision of the Hon'ble High Court of Madras erases its value as binding precedent. Inasmuch as no appeal had been filed, it is not for the Committee of Commissioners to take a stand that the decision of the Hon'ble High Court of Madras is in error. Further, the decisions of the Tribunal appears to have been overlooked by the Committee of Commissioners. 6. We have heard Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hence, amounts so paid would 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.' 11. The query raised relates to a contra situation, one, where amounts have been received by an employee from the employer by reason of premature termination of contract of employment, and the taxability thereof. The Board has answered in the negative, pointing out that such amounts would not be related to the rendition of service. Equally, so in my view, the employer cannot be said to have rendered any service per se much less a taxable service and has merely facilitated the exit of the employee upon imposition of a cost upon hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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