Western Coalfields Ltd vs Commissioner Of Central Excise Madurai on 20 February, 2019
7. We find that the Tribunal in the case of Madhya Pradesh
Poorva Kshetra Vidyut Vitaran Company Ltd (supra) has dealt an
ST/86225/2021
4
identical issue and has held against the Revenue, holding that
the amount received as compensation for breach of contract
should not be considered as taxable service within the purview of
'declared service' as per Section 66E ibid. We also find that the
Tax Research Unit of the Department of Revenue in the Ministry
of Finance vide Circular dated 3rd August, 2022 has specifically
clarified that the compensation received on account of breach of
contract should not form part of declare service for the purpose
of payment of service tax by the assessee. Relevant paragraph
of the said circular is extracted below.