2018 (3) TMI 1492 - AT - Service Tax

Security Agency Services - whether the comprehensive fire services provided by the appellant to M/s Tata Motors Limited would attract service tax under the category of Security Agency Services - Held that - Security Agency Services are basically and primarily related to the security of any property. The use of the expression in any manner , widens the scope of the said services. If the services provided relates to the security of the property, they would attract service tax under the said category - Admittedly, in the present case, the appellant are providing services for security of their customer s property from fire. The same would get covered under Security Agency Services inasmuch as the definition of the said services nowhere specifies a particular type of security of the property and further it does not excludes any particular type of service relating to security of the property - demand upheld. Extended period of limitation - Penalty - Held that - the appellant was aware of the fact that the comprehensive fire services being provided by them would attract service tax liability under Security Agency Services The appellant have not given any valid reason that whey the service tax was being paid in respect of the services offered by them to M/s HAL where they were discharging service tax in respect of services provided to M/s TML - the malafides on part of appellant justified - extended period of limitation rightly invoked - penalty upheld. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Embezzlement of Service Tax and wrong computation in tax assessment.
2. Bifurcation of branch affecting service tax assessment.
3. Taxability of comprehensive fire services under "Security Agency Services".
4. Limitation period for tax demand and imposition of penalty.
5. Appeal filed by Revenue on the taxability of comprehensive fire services.

Embezzlement of Service Tax and wrong computation in tax assessment:
The appellant, engaged in cleaning and security services, faced discrepancies in tax computation due to embezzlement by an employee. The advocate argued for a wrong computation leading to excess demand. The Tribunal remanded the matter for verification by the Adjudicating Authority due to factual nature of the issue.

Bifurcation of branch affecting service tax assessment:
The appellant's branch bifurcation caused confusion in tax assessment as revenue raised demands on transferred balances. The Tribunal remanded the matter to the Adjudicating Authority for examination of records and to address the appellant's plea, ensuring the appellant's opportunity to present their case.

Taxability of comprehensive fire services under "Security Agency Services":
The appellant contended that providing fire services to a client does not fall under "Security Agency Services." However, the Tribunal held that since the services were for protecting the client's property, they qualified as "Security Agency Services," attracting service tax.

Limitation period for tax demand and imposition of penalty:
The appellant's prior payment of service tax for similar services to another client showed awareness of tax liability. The Tribunal found the appellant's actions reflected malafide intentions, justifying the extended period for tax demand and penalty imposition.

Appeal filed by Revenue on the taxability of comprehensive fire services:
In a related appeal by the Revenue, the Tribunal ruled that the comprehensive fire services provided by the appellant fell under "Security Agency Services," setting aside the Commissioner's order and allowing the Revenue's appeal.

This judgment addresses issues of tax computation errors, branch bifurcation impact on tax assessment, taxability of specific services, limitation period for tax demands, and penalties. The Tribunal emphasized the importance of factual verification, remanding matters for detailed examination by the Adjudicating Authority. The decision highlighted the broad definition of "Security Agency Services" and upheld tax liabilities for services related to property security. Additionally, the Tribunal considered the appellant's prior tax payments to determine awareness of tax obligations, justifying penalty imposition. The ruling in the Revenue's appeal further clarified the tax treatment of comprehensive fire services under the specified category.