Service Tax on Liquidated Damages for Poor Material Quality: CESTAT remands case back to Adjudicating Authority

Ratnamani Metals & Tubes Limited Vs CCE & ST, Kutch (Gandhidham)  (CESTAT Ahmedabad) We find that the facts are not in disputed that amount recovered by the appellant is towards the poor quality of goods purchased by them. The Revenue has demanded service tax, considering the activity in the present case under Section 66E (e), which reads as under:- “(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act.” We find that the appellant have taken the ground before the Adjudicating Authority as well as Commissioner (Appeals) that t...