Case Law Details
South Eastern Coalfields Ltd. Vs Commissioner of Central Excise and Service Tax (CESTAT Delhi)
The Principal Bench of Hon’ble CESTAT set aside the Service Tax demand of Rs. 32.76 Crores approx., plus equal penalty and applicable interest, on the amount of Liquidated Damages / Forfeiture of EMD / Penalty recovered from the various contractors & suppliers / Coal buyers under FSA and coal e-Auction scheme. The said demand was raised by invoking the provisions contained in Section 66E(e) as ‘Declared Service’ which reads as “agreeing to an obligation or to refrain from an act or to tolerate an act or a situation or an act”.
It was held that it not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the appellant towards “consideration” for “tolerating an act” leviable to service tax under section 66E(e) of the Finance Act.
FULL TEXT OF THE CESTAT JUDGEMENT
This appeal has been filed by M/s South Eastern Coalfields Ltd.1 to assail the order dated December 18, 2018 passed by the Chief Commissioner, officiating as the Principal Commissioner, by which the demand of service tax has been confirmed with interest and penalty by invoking the extended period of limitation contemplated under the proviso to section 73 of the Finance Act, 19942.
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