No Service Tax on Penalties for breach of contractual terms: CESTAT Delhi

South Eastern Coalfields Ltd. Vs Commissioner of Central Excise and Service Tax (CESTAT Delhi)

The appeal by South Eastern Coalfields Ltd. (SECL), a subsidiary of Coal India Ltd., contested a service tax demand confirmed by the Principal Commissioner through an order dated December 18, 2018. The tax authorities had alleged that penalties, liquidated damages, and forfeitures collected by SECL under commercial contracts from July 2012 to March 2016 were taxable as “declared services” under Section 66E(e) of the Finance Act, 1994. These amounts were charged for breaches of contrac

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