Ex-gratia charges for making good damages under a contract for unintended event not liable to service tax

K. N. Food Industries Pvt. Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Allahabad)

Observing that the ex- gratia charges made by principal to assessee- appellant were towards making good losses or injuries arising from unintended events and did not emanate from any obligation on part of any of the parties to tolerate an act or a situation, CESTAT Allahabad has held that the payment cannot be considered to be for some services. The Tribunal was of the view that for invocation of Section 66E(e) of the Finance Act,

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