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2023 (12) TMI 906 - AT - Service TaxLevy of Service tax - security agency services - collection of security charges for providing police guards to various banks for their security - HELD THAT - It has been held in the case of SUPERINTENDENT OF POLICE VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR 2019 (11) TMI 250 - CESTAT NEW DELHI that merely because the Police may charge a fee it would not become a person engaged in the business of providing security and, therefore, no service tax can be levied. The impugned order dated 28.07.2014 is set aside and appeal is allowed.
Issues involved:
The issues involved in this case are the levy of service tax on security charges collected for providing police guards to banks, and the examination of penalties imposed under sections 76, 77, and 78 of the Finance Act. Levy of Service Tax on Security Charges: The appeal challenges the order confirming the demand of service tax and interest, and remanding the matter for penalties under sections 76, 77, and 78 of the Finance Act. The key issue is whether the collection of security charges for providing police guards to banks falls under the category of "security agency services" u/s 65 (94) and u/s 65 (105)w of the Finance Act. The Tribunal has previously ruled in favor of the appellant, emphasizing that charging a fee does not automatically classify the Police as "a person engaged in the business of providing security," thus no service tax can be imposed. The decision referenced clarifies that fees collected by a sovereign or public authority for statutory functions, deposited in the Government treasury, and collected as per law are not liable for service tax under Security Agency Services. Penalties under Sections 76, 77, and 78 of the Finance Act: The order under appeal also remanded the matter for examining the penalties imposed under sections 76, 77, and 78 of the Finance Act. However, the Tribunal's decision in this case sets aside the impugned order dated 28.07.2014 and allows the appeal based on the precedent that charging a fee does not make the Police "a person engaged in the business of providing security," thus no service tax is applicable. The decision highlights that the Police's statutory duty to provide security, collection of fees as per law, and depositing collected amounts into the Government treasury fulfill the conditions outlined in the CBEC circular, making the service tax demand unsustainable.
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