2009 (4) TMI 133 - AT - Service Tax

Security agency service appellants have not paid Service Tax on the amounts received towards EPF ESI and Bonus received by them on the taxable services rendered on positing Security Guards for Bird Scaring for the Airport Authority of India Held that - activity of bird scaring does not fall under the purview of the activities of the security agency. If an activity or a service is not covered under a particular service it cannot be taxed

Summary

Issues:
1. Whether "Bird Scaring Services" fall under the definition of "Security Agency Services."

Analysis:
The appeal was filed against the Order-in-Original (OIA) which demanded Service Tax for Security Agency Services provided by the appellants. The lower authority confirmed the demand and imposed penalties. The appellants then appealed, and the Commissioner (Appeals) set aside the penalty under one section but retained the penalty under another section. The main issue was whether "Bird Scaring Services" provided by the appellants could be considered as falling under the definition of "Security Agency Services."

The Tribunal examined the agreement between the appellants and the Airport Authority for bird scaring services, which was a lump sum contract specifically for bird scaring activity at the airport. The purpose of this activity was to prevent accidents by scaring birds away from the airport area. The definition of security agency under Section 65(94) of the Finance Act, 1994 includes services related to the security of property. The Tribunal referred to previous decisions which established that services provided by security agencies must relate to security personnel or property. In this case, the Tribunal found that bird scaring did not fall under the purview of security agency activities. It was concluded that if an activity is not covered under a specific service category, it cannot be taxed. The Tribunal disagreed with the Commissioner (Appeals) who considered bird scaring as part of security services, stating that it was a preventive measure rather than security-related. Consequently, the impugned order demanding Service Tax for bird scaring services was set aside, and the appeal was allowed.

In summary, the Tribunal held that "Bird Scaring Services" provided by the appellants did not fall under the definition of "Security Agency Services" as per the Finance Act, 1994. The decision was based on the specific nature of the bird scaring activity and its purpose, which was deemed preventive rather than security-related. The Tribunal referred to relevant legal definitions and precedents to support its conclusion, ultimately setting aside the demand for Service Tax on the bird scaring services.