Service tax not leviable on amount received for loss/damage caused by breach of contract

Fabindia Limited Vs Commissioner (CESTAT Delhi)

CESTAT Delhi held that any penalty or compensation received for any loss or damage caused by breach or non performance of the terms of the contract is not by way of consideration. Accordingly, service tax is not leviable on the same.

Facts- The appellant is engaged in manufacturing of readymade garments and made-up articles of textile falling under Chapters 62 and 63 and was paying Excise Duty @ 2% under the Please become a Premium member. If you are already a Premium member, login here to access the full content.