Liquidated damages, received under any contract, not liable to service tax

Madhya Pradesh Poorva Kshetra Vidyut Vitaran Company Limited Vs Commissioner of CGST & Central Excise (CESTAT Delhi) Facts- The appellants are public sector undertakings established by the Government of Madhya Pradesh for distribution of electricity. The issue is whether service tax can be levied on liquidated damages received by the appellants from the other parties who failed to perform as per the contracts. Conclusion- Compensation can be of two forms : un-liquidated damages or liquidated damages. If the suffering party sues the other in a court and damages are award by the court such d...