Compensation for Short Lifting of Electricity not Service u/s 66E(e) of Finance Act, 1994: CESTAT sets aside

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that compensation paid for short-lifting of electricity does not qualify as a taxable service under Section 66EE of the Finance Act, 1994. The case involved a contractual agreement where the appellant was compensated for non-lifting of agreed amounts of electricity by another party. The revenue authorities had demanded service tax, contending that the compensation should be treated as a taxable service. However, the Tribunal held that this compensation is not for any service provided but for a breach of contract, and hence, is not subject to service tax. The service tax demand was accordingly set aside, providing relief to the appellant.