2018 (6) TMI 479 - AT - Service Tax

Levy of tax on State Police - Security agency service - Section 65 (105) (ee) of the Finance Act, 1994 - Held that - Deployment of Police personnel on payment basis, will also to be considered as part of statutory function of the State Government. Thus, the activity undertaken by the Police Department is not covered by the definition of security agency service - reliance placed in the case of THE DEPUTY COMMISSIONER OF POLICE JODHPUR, SUPERINTENDENT OF POLICE VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, JAIPUR 2016 (12) TMI 289 - CESTAT NEW DELHI , where Tribunal has held that Police Department, being an agency of the State Government, cannot be considered to be a person engaged in the business of running security services - demand do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
Confirmation of the adjudged demand under security agency service under Section 65 (105) (ee) of the Finance Act, 1994.

Analysis:
The judgment revolves around the confirmation of the adjudged demand under security agency service as per Section 65 (105) (ee) of the Finance Act, 1994. The Tribunal referred to a previous Final Order that established a precedent regarding the status of the Police Department in relation to security services. The Tribunal concluded that the Police Department, being an agency of the State Government, does not fall under the definition of a 'person' engaged in the business of running security services. It was emphasized that the deployment of Police personnel on a payment basis is considered part of the statutory function of the State Government, as per the statutory notification. Therefore, the activity undertaken by the Police Department does not qualify as a security agency service.

The Tribunal found no merits in the impugned order based on the established precedent and the interpretation of the statutory provisions. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant. The decision was made after a thorough consideration of the legal position and the specific circumstances of the case. The judgment highlights the importance of legal interpretation and precedent in determining the scope and applicability of statutory provisions related to security agency services. The detailed analysis provided clarity on the interpretation of the law and its application to the specific facts of the case, resulting in a favorable outcome for the appellant.