Service tax on penalty

There is no service called airport service as per my knowledge neither in the erstwhile section 65 nor in the new regime of service tax effective from 01-07-2012. If you are charging penalty in relation to a service which is a taxable service then you need to include the value of the said penalty or demurage in the gross value of the service charged to your customer. Only then Service tax is payable on the entire value of the service including "penalty" as you said.