Held - It was found that as per Finance Act, 1994, the basic element to charge Service Tax is the element of service i.e. there should be an activity in the form of ‘service’ or ‘declared service’. However, in the instant case, the said amount has not been collected towards any activity liable for Service Tax but as compensation/penalty for breach of terms and conditions of the contract [Agreement dated 12.07.2011] i.e. non-compliance .....

Held - In the instant case, the parties entered into the Agreement dated 12.07.2011 for import of a specified quantity of coal and for availing various port services for the same and not for flouting the terms of the agreement so that the penal clauses were the reason for the execution of the Agreement dated 12.07.2011 for an agreed consideration. It is only in situations where the condition of ‘MGT’ is not satisfied by the service re.....

Held - Compensation can be of two forms : un-liquidated damages or liquidated damages. If the suffering party sues the other in a court and damages are award by the court such damages are un-liquidated damages. The quantum of damages is decided by the court taking into account the facts and circumstances of the case and the damage suffered. Liquidated damages are those damages and which are built into the contract itself......

Held - We find that the Tribunal in the case of South Eastern Coalfields Limited has examined in detail the provisions of Declared Service under Section 66E(e) of the Finance Act, 1994, which was introduced in the Negative List based regime effective from 01.07.2012. In the said case, the issue for consideration before the Tribunal was whether the assessee company was liable to pay service tax under the aforesaid provisions on the liquida.....

Held - Liquidated damages are demanded by the applicant from the contractor due to the delay in commissioning of the project and postponement in the taking over date beyond the milestones fixed for completion of project.

When the parties to a contract specify the time for its performance, it is expected that either party will perform his obligation at the stipulated time. But if one of them fails to do so, the question arises what i.....

Held - The appellant had no choice of tolerating cancellation or not. The appellant has not chosen to tolerate the cancellation. The cancellation was in pursuance of the order of the Supreme Court and not as a result of a contract to tolerate cancellation. There was no consideration for tolerating the cancellation, only a compensation provided for statutorily for the investment made in the mines by the appellant.

Even in cases where an.....