2006 (2) TMI 656 - AT - Service Tax

Summary

Issues involved: Interpretation of Section 67 of the Finance Act regarding the value of taxable service provided by a Security Agency for the purpose of calculating Service Tax liability.

Summary:
The Appellate Tribunal CESTAT NEW DELHI heard an appeal filed by a Security Agency against the order-in-appeal passed by the Commissioner (Appeals) confirming a Service Tax demand of Rs. 12,856. The agency contended that they should only pay tax on the commission received for providing security services, not on the gross amount charged from clients. The Revenue argued that as per Section 67 of the Finance Act, the taxable service is the gross amount charged by the agency from the client. The Tribunal noted that Section 67 is clear on this matter, stating that the gross amount charged is relevant for calculating Service Tax. Consequently, the Tribunal upheld the demand but reduced the penalty to Rs. 50,000 considering the circumstances. The appeal was disposed of accordingly.

In conclusion, the Tribunal clarified the interpretation of Section 67 of the Finance Act in relation to the taxable service provided by Security Agencies, emphasizing the importance of the gross amount charged by the agency for calculating Service Tax liability.