2018 (9) TMI 31 - AT - Service Tax

Levy of Service tax on U.P. Police - Security Agency Services - the appellant U.P. Police were providing Police Guard for escorting and handling of cash in transit and for deposits by the Banks in the currency chest for various Banks - Held that - The services provided by appellant to various Banks was part of the statutory duty and therefore the same was not covered by provisions of Finance Act, 1994 related to Service Tax - Identical issue decided in the case of DY. INSPECTOR GENERAL OF POLICE VERSUS COMMISSIONER OF C. EX., BHOPAL 2017 (11) TMI 346 - CESTAT NEW DELHI , where it was held that the police department which is in the agency of State Government cannot be considered to be a person engaged in the business of running security services - Appeal allowed - decided in favor of appellant.

Summary

Issues: Interpretation of whether services provided by the appellant to various banks for escorting and handling cash in transit fall under the definition of "Security Agency Services" subject to service tax.

Analysis:
The case involved an appeal arising from a show cause notice demanding service tax from the appellant, the U.P. Police, for providing police guard services to escort and handle cash in transit for various banks. The Revenue contended that the consideration received by the police for these services fell under the definition of "Security Agency Services." The Original Authority confirmed the demand, which was upheld by the Commissioner (Appeals), leading to the appellant approaching the Tribunal for redressal.

The appellant argued that the issue had already been settled in previous cases, citing Final Orders passed by the Tribunal in similar matters involving police departments providing security services. Specifically referring to cases involving the Deputy Commissioner of Police, Jodhpur, and the Deputy Inspector General of Police, the appellant contended that providing security services to public sector undertakings and government departments was part of the statutory duty of the police and should not be subject to service tax under the Finance Act, 1994.

After hearing arguments from both sides, the Tribunal found that the issue was no longer open to question based on the Final Order in the case of the Deputy Inspector General of Police. The Tribunal concluded that the services provided by the appellant to the banks were part of their statutory duty and thus not covered by the provisions of the Finance Act, 1994 related to service tax. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.