Service Tax is not payable on liquidated damages

Bharat Heavy Electricals Limited Vs Commissioner of G.S.T and Central Excise (CESTAT Chennai) CESTAT Chennai held that amount received in the form of penalty amount, forfeiture of earnest money deposit and liquidated damages is not leviable to service tax. Facts- Entertaining a doubt, based on specific intelligence that the appellant is charging and recovering Liquidated Damages for delay in supply and service contract as per the written agreements between them but did not pay the Service Tax on it, it appears that there was an enquiry against the appellant by the Directorate General of Goods ...