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2021 (9) TMI 58 - AT - Service TaxSecurity Agency Service - Manpower Supply services - Cleaning Service - applicability of Section 11D of Central Excise Act, 1944 and Section 73A of the Finance Act, 1994 - extended period of limitation - HELD THAT - It is found from the Adjudication Order that the appellant was engaged in providing services related to Security, Manpower Supply for Cleaning, Washing, Sweeping, Gardening, Up keeping, Watch Ward, Grass Cutting, Checking, Mechanised Cleaning, Driving, Office Assistance etc. They were registered with the Service Tax Department under the category of Security Agency which was introduced in the Service Tax net on 16.10.1998 vide Clause 94 of Section 65 of Chapter V of Finance Act, 1994 as amended. In the present case, the appellant in the statement during the investigation categorically stated that watch and ward service are for checking of tickets of the Metro Railways. But, no investigation was taken. Therefore, the Adjudicating authority passed the order on a conjecture that the appellant had also function not merely on watch and ward of checking tickets, which cannot be accepted. Extended period of limitation - HELD THAT - It is found fhe Adjudication Order that the Adjudicating authority had merely observed that the applicant is a very old Registered Firm and they have not discharged their service tax liability properly and therefore the extended period of limitation would be invoked. There is no material available on record to invoke the extended period of limitation. Apart from that, a part of demand is liable to be dropped on merit and therefore the extended period of limitation cannot be invoked for the balance amount. Hence, the balance amount of tax is liable to be set aside on limitation. The expressions every person who is liable to pay duty under this Act or Rules made thereunder, and has collected any amount in excess of the duty in Section 11D of the Act make it clear that the said provision would be applicable where the person is liable to pay duty and collected any amount in-excess of the duty assessed. Apart from that Section 73A of the Finance Act, 1994 has been introduced with effect from 18.04.2006 and that according to Sub Section (2) of Section 73A, Service Tax collected on non-taxable service is demandable/payable to Government exchequer. The Learned Departmental Representative had not disputed the legal position - the present case is prior to insertion of Section 73A(2) of the Act 1994 and therefore the demand of the amount under Section 11D is not justified. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Classification of services provided by the appellant. 2. Applicability of Service Tax on "Watch and Ward" services. 3. Bar of limitation and suppression of facts. 4. Applicability of Section 11D of the Central Excise Act, 1944. Issue-wise Detailed Analysis: 1. Classification of Services Provided by the Appellant: The appellant was registered under Service Tax Laws for providing "Security Agency Service" and also provided other non-taxable services such as Manpower Supply, Cleaning, Washing, Sweeping, Gardening, Watch & Ward (Checking Assistance) to Metro Railways. The demand of Service Tax was primarily related to Watch & Ward Service for checking tickets for Metro Railways, which the appellant argued did not fall under the "Security Agency Service" category. The appellant supported this contention with a Certificate from the Chief Operation Manager of Metro Railways and the Letter of Acceptance from Metro Railways. 2. Applicability of Service Tax on "Watch and Ward" Services: The Tribunal examined whether the "Watch and Ward" service provided to Metro Railways, which involved checking tickets and guiding passengers, fell under the definition of "Security Agency Service." The definition of "Security Agency" under Section 65(94) of the Finance Act, 1994, includes services related to the security of property or persons. The Tribunal found that the "Watch and Ward" service provided by the appellant did not involve security of property or persons but was limited to checking tickets and guiding passengers through automated gates. Thus, it did not fall under the "Security Agency Service" category. 3. Bar of Limitation and Suppression of Facts: The appellant argued that the entire demand was barred by limitation as there was no suppression of facts with intent to evade tax. The Adjudicating authority had invoked the extended period of limitation on the grounds that the appellant, being an old registered firm, had not discharged their service tax liability properly. The Tribunal found no material evidence to support the invocation of the extended period of limitation. Moreover, the demand was based on bills, contracts, and agreements, and the department was aware of the facts from an earlier Show Cause Notice. Therefore, the extended period of limitation could not be invoked. 4. Applicability of Section 11D of the Central Excise Act, 1944: The Adjudicating authority observed that the appellant had collected Service Tax on non-taxable services, bringing the amount under the ambit of Section 11D of the Central Excise Act, 1944. However, the appellant contended that Section 11D was not applicable to non-taxable services. The Tribunal noted that Section 11D applies to amounts collected in excess of the duty assessed on excisable goods. Since Section 73A of the Finance Act, 1994, which allows for the recovery of Service Tax collected on non-taxable services, was introduced only on 18.04.2006, and the present case pertained to a period before this date, the demand under Section 11D was not justified. Conclusion: The Tribunal concluded that the demand of Service Tax on "Watch and Ward" services provided to Metro Railways was not sustainable on merit. Additionally, the extended period of limitation could not be invoked due to lack of evidence of suppression of facts. The demand under Section 11D of the Central Excise Act, 1944, was also not justified as it did not apply to non-taxable services for the relevant period. Consequently, the impugned Order was set aside, and the appeal was allowed with consequential relief. (Order pronounced in the open court on 27 August 2021.)
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