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TMI Blog2024 (12) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... services, agreeing to the obligation to refrain from an act or to tolerate an act or a situation, or to do an act under clause (e) of section 66E of Finance Act, 1994 and has clarified that the activities contemplated under section 66 E (e) i.e. when one party agrees to refrain from an act or to tolerate an act or a situation, or to do an act, are the activities where the agreements specifically refers to such an activity and there is a flow of consideration for this activity. The decision of this Tribunal in the case of Dy. General Manager (Finance), Bharat Heavy Electricals Limited [ 2022 (9) TMI 1005 - CESTAT NEW DELHI] wherein the earlier decision of the Tribunal in the case of M/s. South Eastern Coalfields [ 2020 (12) TMI 912 - CESTAT NEW DELHI] was dealt with, has been referred in this Circular. The Board has decided to not to file any appeal against the decision in M/s. South Eastern Coalfields [ 2023 (8) TMI 606 - SC ORDER] . The said decision has also been upheld by Hon ble Supreme Court [ 2023 (8) TMI 606 - SC ORDER] passed in the case of Commissioner of Central Excise and Service Tax vs. South Eastern Coal Fields Limited in Civil Appeal No. 2372/2021. We hold that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contractors. 4. Accordingly vide Show Cause Notice No.30/2016 dated 24.04.2018 service tax amounting to Rs.15,29,685/- on the value received towards providing the declared service defined under section 66 (E)(e) of Finance Act, 1994 was proposed to be recovered as Service Tax alongwith the proportionate interest and the appropriate penalties. The said proposal has initially been confirmed vide Order-in-Original No.25/2018 dated 14.12.2018. The appeal against the said order has been dismissed vide Order-in-Appeal No. 301 (CRM)ST/JDR/2019 dated 26.03.2019. Still being aggrieved, the present appeal has been filed by the appellant. 5. We have heard Mr. Shivam Bansal, ld. Counsel for the appellant and Mr. Aejaz Ahmed, ld. Authorised Representative for the department. 6. Ld. Counsel for the appellant has mentioned that the amount recovered by the appellant is not a consideration for providing any service as for an amount to qualify as consideration there has to be quid pro quo . However, the appellant had not undertaken any activity against the recovery of such amount. Hence the retention of amount do not quality to be called as service under section 65 B (44) of the Act. The demand is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount by tolerating the aforesaid act/omission of service providers/contractors. Both the authorities below have confirmed the demand based on these observations only. However, ld. D.R. has conceded that the issue involved herein stands already decided in favour of the appellant and that the issue is no more res-integra. 9. Having heard both the parties perusing the decisions relied upon by the appellant we observe that this Tribunal in the case of South Eastern Coal Fields Ltd. vs. CCE ST, Raipur reported in 2021 (55) GSTL 549 has already held as follows:- There is marked distinction between conditions to a contract and considerations for the contract . A service recipient may be required to fulfill certain conditions contained in the contract but that would not necessarily mean that this value would form part of the value of taxable services that are provided. Hence, payment of the impugned compensation charges in the present case merely amounts to fulfillment of the condition envisaged in Para No. 6.5.3 of the Agreement dated 12-7-2011 and not consideration for the said contract [Agreement dated 12-7-2011]. 12 . Further, the issue of leviability of Service tax on penalty, liquida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged which has no nexus with the taxable service and is not a consideration for the service provided does not become part of the value which is taxable under the Finance Act. (b) Union of India v. International Consultants and Technocrats [2018 (10) G.S.T.L. 401 (S.C.)] - since Service Tax is with reference to the value of service, as a necessary corollary, it is the value of the services which are actually rendered, the value whereof is to be ascertained for the purpose of calculating the Service Tax payable thereupon. (v) M/s. M.P. Poorva Kshetra Vidyut Vitran Co. Ltd. v. Principal Commissioner CGST and CE, Bhopal [2021 (2) TMI 821]/2021 (46) G.S.T.L. 409 (Tri. - Del.), wherein the ratio of the decision in the case of M/s. South Eastern Coalfields (supra) was followed and the order confirming the demand of Service Tax on the amount collected towards liquidated damages and theft of electricity was set aside. 10. From the perusal of these decisions it becomes abundantly clear that the issue of considering a forfeited amount as an amount of consideration towards declared services stands already settled in favour of the assessee. The same is already held to not to be the consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X
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