No Service Tax on Liquidated Damages for Delay in Contract Performance

Bharat Heavy Electricals Ltd Vs Commissioner of Central Tax (CESTAT Hyderabad) The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad, allowed the appeal filed by Bharat Heavy Electricals Ltd. against the Order-in-Appeal dated 30.01.2020, which had upheld the Order-in-Original dated 14.08.2018 confirming service tax demand of ₹55.59 lakh along with equal penalty. The dispute related to amounts collected by the appellant from vendors and suppliers as “liquidity damages” under contractual penalty clauses. The contracts entered into by the appellant for supply of goods a...