Order date – 25 March 2024

Parties: M/s. Hyundai Motor India Ltd Vs Commissioner of GST & Central Excise

Facts –

• The Appellant, M/s. Hyundai Motor India Ltd, was imposed with service tax liability fastened on the liquidated damages received.

Issue –

• Whether the Revenue authorities are justified in demanding service tax on the liquidated damages?

Order –

• The Tribunal observed that the issue has already been addressed to in M/s. South Eastern Coalfields Ltd. Vs. CCE & ST, Raipur reported in 2020 (12) TMI 912 – CESTAT, New Delhi and settled in favour of the taxpayer and it was followed in many other orders.
• Further, vide Circular No. 214/1/2023-ST dated 28.2.2023, even the Board had accepted the view of the CESTAT and decided not to prefer appeals before the Hon'ble Supreme Court against CESTAT orders.
• Thus, the service tax liability fastened on the appellant on the liquidated damages received does not survive and hence following the ratio of the orders, the Tribunal set aside the impugned order and allowed the appeal.