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TMI Blog2023 (12) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;BLE MEMBER (JUDICIAL), MR. RAMESH NAIR And HON'BLE MEMBER (TECHNICAL), MR. C.L.MAHAR Shri Sagar Shah, Chartered Accountant for the Appellant Shri A K Samota Superintendent (AR) for the Respondent ORDER RAMESH NAIR The brief facts of the case is that the appellant are engaged in providing services to private persons, for companies for activities like escort of cash, security services to private/ public sector banks , security to individuals, Securities and others. On the said activities certain amount based on the cost recovery concept was recovered by the appellant from the service receivers. The case of the department is that the appellant is providing security agency service as defined under Section 65 (105) (w) of the Finance Act, 1994 and the same is liable for service tax. 2. Shri Sagar Shah, Learned Chartered Accountant appearing on behalf of the Appellant submits that the appellant being a police department of Government providing the security service in the interest of public to maintain the law and order. The services to the public is the sovereign function of the Government which is not liable for the service tax as the police department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the business of rendering services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity, whether of a personal nature or otherwise, including the services of providing security personnel. 9. The other relevant circular issued by C.B.E. C. is Circular No. 89/7/2006-S.T., dated 18-12-2006 is reproduced below : The activities assigned to and performed by the sovereign/public authorities under the provisions of any law are statutory duties. The fee or amount collected as per the provisions of the relevant statute for performing such functions is in the nature of compulsory levy and are deposited in the Govt. Account. However, if a sovereign or public authority provides a service, which is not in the nature of statutory activity and the same is undertaken for consideration (not a statutory fee), then in such cases service tax would be leviable as long as the activity undertaken falls within the scope of a taxable service as defined. 10. The appellants have argued that the term person appearing in the definition must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but the same has been used in terms of the work. He has accordingly held that as long as consideration is being received by police for providing security service, it is to be presumed to be in the nature of business. The term business connotes that it is an activity undertaken with the intent of earning profit. The charges recovered by police are in the nature of cost recovery for the additional police force deployed on request for maintaining security and law and order. It is also the submission of the police department that the deployment of additional police force at the request of banks and other institutions or other events has been done only for maintenance of law and in the absence thereof there could arise major security issues in relation to person or property. In the light of the submissions made, we are of the view that the activities undertaken by the police, for which charges have been recovered, cannot be held to be in the nature of business activity. 12. Now, we turn to the C.B.E. C. Circular No. 89/7/2006-S.T., dated 18-12-2006. The circular has indicated under what conditions an activity performed by a sovereign/public authority should be categorize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itutions/banks and other organizations, and notification number F.1(K)(16)Gr.-2/05, dated 15-1-2008 which notifies the charges to be recovered on providing/deploying/rendering police force for security purposes. In the notification number dated 19-5-2008, the charges fixed per day are as follows : 1 Constable Rs. 250 per day 2 Head constable Rs. 300 per day With this it is wide and clear that the user charges are in the nature of amount collected as per the provision of the relevant law. (iii) The amount collected is to be deposited into Government treasury. As per the requirement of the General Finance Account Rules issued by the Rajasthan State Government, the Government dues are to be collected and paid into the Government treasury. The appellant, therefore, is required to collect the usage charges and credit the same in the Rajasthan State Government treasury. The submission made by the police department in this regard is that the fees recovered by them is for provision of additional police force. They have referred to Section 46 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. s circular on this subject, the fees collected by the police department is in the nature of fee prescribed for performing statutory function, which has been deposited into the Govt. treasury. In the light of the C.B.E. C. s circular also, there can be no levy of service tax on such activities carried out by the police department. 14. Both sides have relied on several case laws. However, none of the cases are squarely covering the present issue of levy of service tax on State Police. Some touching upon the subject have dealt with only stay petitions. As such, we have not discussed them at length. 15. In line with the above discussions, the appeals filed by the police department succeed. The impugned orders are consequently set aside. (ii) In the case of Superintendent of Police (supra) this Tribunal has passed the following order: The fact of the case are that the appellant was engaged in providing the Services to private persons or companies for activities, like Escort of Cash, etc to the public/Private Sector Banks, Security to individuals, Securities for Cricket Matches and other functions organized etc. On the said activities for providing these service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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