2018 (9) TMI 385 - AT - Service Tax

Classification of Service - Security service or not? - appellants are engaged in providing security services to the bank as well as cash van to the bank for carrying the cash from one place to another - Short payment of Service Tax - Held that - The appellants are providing security service under a separate contract and also providing cash van to the banks for transporting the cash from one place to another place. Admittedly, the cash vans are having the security guards but the dominant service is to provide cash van for transportation of cash from one place to another. Admittedly, in this case, the main service provided by the appellant is cash van service. Whether Cash Van service shall do qualify as Security Service or Supply of Cash Van Service ? - Held that - Providing of cash van service with security guard is covered under cash van service and cannot be termed as security services as the dominant service is transportation of cash from one place to another through these cash vans - the appellants are not liable to pay differential Service Tax under the category of security service - Penalty not imposable. Reliance placed in the case of Kingfisher Airlines Ltd. v. Commissioner of Service Tax, Mumbai 2015 (11) TMI 54 - CESTAT MUMBAI (LB) , wherein it was held that the dominant service is transportation of passenger by air and Service Tax is not payable on excess baggage charges under the transportation of goods by air. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand under the category of 'security service'.

Analysis:
The appellants provided security services and cash van services to a bank. An audit revealed discrepancies in their financial documents and Service Tax Returns. Show cause notices were issued for demanding Service Tax under 'security service'. The appellants argued that providing cash van services does not fall under 'security service'. The Revenue contended that cash van services inherently include security services. The Tribunal examined the agreements and held that the main service provided was cash van transportation, not security services. Citing a similar case, the Tribunal ruled in favor of the appellants, stating that cash van services with security guards are distinct from security services. Therefore, the appellants were not liable to pay differential Service Tax under the category of 'security service'. The impugned orders were set aside, and the appeals were allowed.

Conclusion:
The Tribunal found that the appellants' primary service was providing cash van services, not security services. Relying on precedent, it was established that cash van services with security guards do not fall under the category of 'security services'. Consequently, the demand for Service Tax under 'security service' was deemed unsustainable, and no penalties were imposed. The appeals were allowed, providing consequential relief to the appellants.