No Service Tax on liquidated damages recovered for delayed contractual performance

Bharat Heavy Electricals Limited PSWR Vs Commissioner of Central Excise and Service Tax (CESTAT Mumbai) The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai first allowed the appellant’s miscellaneous application for early hearing and, with the consent of both parties, proceeded to hear and dispose of the appeal on merits. The dispute concerned the levy of service tax on liquidated damages/penalties recovered by the appellant from its suppliers and contractors for delayed completion of contractual work or delayed supply of goods. The Service Tax Department examined the...