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TMI Blog2001 (11) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... provided by them is not only service rendered, but jobs carried out on behalf of the client amounting to recoverable expenses of the actual expense, cost or price incurred. Their claim is that if they provide a security-guard and bill a client, 70% of the bill amount would be towards the actual wages of the security-guard, 20% would be towards statutory and mandatory benefits such as Provident Fund, Employment State Insurance Scheme, Uniform Allowance, etc., 5% would be towards the administrative expenses and the remaining 5% would be the actual income of the fee charged by the petitioners. 3. As regards the challenge, the petitioners have given the background of the taxation on services. The Act, which was passed by way of Finance Act, 1994, initially covered few sectors like Stock Brokers, Non-life Insurance Corporations and telephone services. It is then pointed out that the scope of the service tax was enlarged by Finance Act, 1996 levying the service tax on Advertising Agencies, Carrier Agencies, Pager-services. Then it is pointed out that other services were also brought in the dragnet of the service tax by Finance Act No. 2 of 1998 whereby the services provided by the Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h has explained as to how the valuation of taxable services would be made in case of advertising agencies and further providing that it is only the commission received by the advertising agencies which would be the value of the taxable services. Similarly, a reference is also made to Sec. 67(g), (a) and (k) which defined the value of taxable service in relation to Customs House Agents, Stock Brokers and Air Travel Agents respectively. A reference is also made to Sec. 67(j) and it is tried to be contended that in respect of the services covered by these sub-sections the value of the taxable service differs from the value of the taxable service offered by the security agents. It is tried to be suggested that in case of the above services, the "service part" is segregated from the "expenses part" involved in providing the services and it is only the "service part" which has been made taxable in contradistinction with the service provided by the security agencies where the gross amount charged by the security agencies has been made taxable with the exception that the service tax shall be exempted on the gross amount charged for the security provided for movable properties. The further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewing the service tax to be on the petitioners' profession, trade, calling and employment and therefore covered by Entry 60 of List II of the Seventh Schedule. 8. Mr. Swamy, learned Counsel appearing on behalf of the petitioners, at the outset, made a statement before us that his contention to the effect that the tax is beyond the "legislative competence" has already been covered by the Division Bench judgment of this Court, to which one of us (V.S. Sirpurkar, J.) was a party, in a batch of writ petitions (W.P. No. 8539 of 2000 etc.) where such a challenge came to be made on behalf of Chartered Accountants. The Court has taken the view that the service tax has different aspects and the aspect of providing a service was different and independent of the aspect of the profession. The Court has also held therein that the professional tax which was being levied by the State on all kinds of professions was only on account of the professionals being allowed to carry on a particular profession in that particular State. Mr. Swamy, therefore, says that even if the running of a security agency could be called a "profession", the judgment will cover the issue against him. Even if it is sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d such discretion had always been recognised and approved by the Apex Court. Therefore, we are not impressed by the contention raised in the petition that the security agencies were chosen for being included in the service tax dragnet. 10. Similarly, we are also not impressed by the contention raised that in case of some other agencies while being taxed under the service tax, the "expenditure" incurred while offering the services are excluded and in case of security agencies that expenditure is not excluded and the gross amount received by the security agencies is made taxable. We have dealt with this question in paragraph 22 of the aforesaid judgment of the advertising agencies. We had compared the case of manpower agencies covered under Sec. 65(24) and we had pointed out that on this ground the challenge cannot be made particularly relying on Art. 14 of the Constitution. In paragraph 23 we have recorded a finding that no fault can be found with the taxing provision with reference to the measure of the tax. We had accepted the contention raised on behalf of the respondent that as to which would be and what would be the deductible amount would essentially depend upon the words ..... X X X X Extracts X X X X X X X X Extracts X X X X
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