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TMI Blog2024 (2) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... e, following the precedent decision of this Tribunal, it is held that as the appellant is not engaged in the business of providing security services, therefore, the appellant is outside the purview of security services as defined under Section 65 (94) of the Finance Act, 1994. The appellant is not liable to pay service tax - the impugned demand against the appellant is set aside - appeal allowed. - MR. ASHOK JINDAL, MEMBER (JUDICIAL) AND MR. K. ANPAZHAKAN, MEMBER (TECHNICAL) None for the Appellant Shri J. Chattopadhyay, Authorized Representative for the Respondent ORDER Both the appeals are having a common issue. Therefore, both are disposed off by a common order. 2. The facts of the case are that the Government of Tripura has entered into a memorandum of understanding with ONGC, which is a Public Sector Undertaking (PSU) owned by the Government of India, for a period of 10 years to raise a full battalion of the Tripura State Rifles mainly for dedicated deployment to ONGC for security services. The same was also provided to the Gas Authority of India, an another PSU owned by the Government of India. 2.1 During the impugned period, for providing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er got the registered with the Department nor did they pay service tax on such amounts recovered. As per Section 65(94) of the Finance Act, 1994, the definitions of Security Agency as well as Security Agency Service are given below for ready reference :- Security Agency means any person engaged 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing services relating to security. Their submission is that the occupation in business by a person is a condition precedent for a security agency. The lower authority has held that the term business does not signify any commercial activity for the purpose of gaining something out of the said activities, 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, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tifications wherein the charges to be recovered for providing additional police force for the purpose of maintaining public security and law and order have been notified. Notification number 27(2)Home/Gr.-6/84, dated 19-5-2008 which notifies the charges for police arrangement in Central Government offices/institutions/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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Govt., cannot be considered to be a person engaged in the business of running security services. Consequently, the activity undertaken by the police is not covered by the definition of Security Agency under Section 64(94) of the Act. We also find that in terms of C.B.E. 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. Further the Ld. CA has informed that the above order of the Tribunal has been upheld by the Hon ble Apex Court vide Order dt. 18.09.2017 in Diary Number 243 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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