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Security Agency Services [Sec 65(105)(w)]
Effective upto 30th June, 2012
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Landmark Service Tax Judgment - Security Agency Services

Introduced With Effect From 16th October 1998
 
Contents
Scope
Exemption
Landmark Judgements
Accounting Code
Service Tax 00440108
Interest  00440109
Penalty 00441323
 
DEFINITION:

According to Section 65 (105) (w), any service provided or to be provided to any person, by a security agency in relation to the security of any property or person, by providing security personnel or otherwise and includes the provision of services of investigation, detection or verification of any fact or activity is a ‘taxable service’.

According to Section 65 (94), “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.

 
SCOPE:
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The ambit of the term security agency is wide enough to include not only agencies rendering services of providing security but also detective agencies, which are providing confidential services in respect of say, financial credibility of any person, trade mark/ copyright infringements etc.

Out of pocket expenses which are reimbursable on actual basis, such as travelling, Boarding and Lodging expenses are not includible in the value for levy of Service Tax. The assessee is required to produce documentary evidence for the purpose.

The security agencies merely supplying labour and man power for any purposes other than providing security services are not liable for Service Tax, irrespective of the fact that they may get covered as Man power Recruitment Agency.

 
SERVICE TAX EXEMPTIONS:
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(a)  Small service providers whose aggregate value of taxable services rendered in the previous year has not exceeded the limit of Rs. 10,00,000/-  (Service Tax Notification No. 8/2008-ST dated 01.03.2008)

(b)  Services provided to the United Nations or International Organisations

(c)  Services provided to Special Economic Zones (SEZ) units (including unit under construction) and SEZ developers

(d)  Services which are exported as per ‘Export of Services’ Rules

(e)  Services provided for official or personal use of foreign diplomatic missions and family members of diplomatic missions.

(f)  Services provided by Reserve Bank of India

(g)  Out of total value of service provided proportionate value of goods and material provided by the Service Provider

 
SERVICE SPECIFIC EXEMPTION:

Abatement in respect of statutory levies and taxes can be granted provided the same has some direct relation with the services rendered to the client, specifically billed to the client and is reimbursable by the client on an actual basis. Statutory levies of the kind like EPF, ESI contribution towards labour welfare fund etc. are required to be borne by all types of employers and not only Security Agency. Such statutory levies have no direct co­relation with the services rendered to the client (in as much as the same arise out of employer-employee relationship) and are not specifically relatable to the services rendered to the client. Therefore, no abatement in respect of such statutory levies is admissible for the purposes of computing the Service Tax liability.

 
RELEVANT SERVICE TAX CIRCULARS/INSTRUCTIONS/TRADE NOTICES:
Service Tax CBEC Instruction Letter F. No. 334/1/2008, dated 29-02-2008 Clarification on rationale of change in the definition from "client" to "any person"
Service Tax 5/98- Trade Notice dated 14-10-1998 Indore Commissionerate  Scope and taxability of services introduced or extended by the Finance Act, 1998 including security agency's services
 
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Case Laws Related

  • STO 2013 CESTAT 962
  • Security Agency Service: Service provided by Corporation: Stay: Prima facie case not made out: Directions for partial pre deposit made.

  • STO 2013 CESTAT 527
  • Security Agency Service: Stay: As the appellant has not contested the service tax liability before the adjudicating authority, they should be directed to deposit the amount of interest which is due to the government on such delayed payment of Service Tax: Directions issued for partial pre deposit.

  • STO 2013 CESTAT 1096
  • Security Agency Service: Demand: Stay: During the relevant period service tax was payable on receipt basis and there were amounts which were billed for services that were never received by the appellant during relevant period and in respect of which they had given the details of disputes pending in various courts and this also has not been taken into account: Matter remanded.

  • STO 2013 CESTAT 571
  • Security Agency Service: Ad-hoc exemption order dt.1.7.2011 issued by the Board exempting security agency services provided by the appellants from 16.10.1998 to 31.03.2009: Demand from 01.04.2009 upheld: Penalties set aside.

  • STO 2013 CESTAT 643
  • Security Agency Service: Limitation: Invocation of extended period of time is also sustainable inasmuch as the appellant deliberately withheld the details of the services rendered from the department and accordingly confirmation of demand invoking the extended period of time is correct in law.

  • STO 2013 CESTAT 551
  • Security Agency: Demand: Stay: Appellant has collected the service tax from their customers and have failed to remit the same to the exchequer : Appellant is a repeated offender and this Tribunal itself in half-a-dozen cases have confirmed pre-deposit of huge amounts which the appellant have collected from their customers, Therefore, it is not a case where any leniency is merited or required to be shown, as the same will send a wrong signal to the tax paying community.

  • STO 2013 CESTAT 460
  • Security Agency: Manpower Recruitment or Supply Agency Service: Demand: Stay: Prima-facie, in view of the sustained failure of the petitioner to appear for hearing before the Primary Authority and before the Appellate Authority as well; the non filing of a written plea of defence to the show cause notice; or any clear assertion on that part of the income received during the assessed period pertains to provision of service which is not Security Agency Services, unable to prima-facie discern any serious violation of fair opportunity, which vitiates the order of Appellate Authority: Directions issued for pre deposit. 

  • STO 2013 CESTAT 504
  • Security Agency Service: Demand: Stay: Plea of the appellant that there were certain bad debts which requires to be excluded: Directions issued to make partial pre deposit and approach original adjudicating authority: Matter remanded.

  • STO 2013 CESTAT 496
  • Security Agency Service: Demand: Stay: the applicant had already collected the amount and had hot deposited the same with the Central Government: Applicants paid part amount subsequently: Directions issued to pay the remaining amount.

  • STO 2013 CESTAT 516
  • Security Agency Service: Appellants collected service tax but not deposited with Government: Directions issued to deposit entire amount of tax with interest.

  • STO 2013 CESTAT 494
  • Security Agency Service: Manpower Supply Service: Demand: Stay: Applicant was providing only security services and no proof of supply of man-power supply has been produced at lower levels and some feeble evidences have been produced before Tribunal as a fresh evidence: Directions issued for partial pre deposit.

  • STO 2012 CESTAT 990
  • Security Service: Matter of taxability in dispute during various periods: Matter remanded for confirmation of demand: Penalties to be set aside.

  • STO 2012 CESTAT 955
  • Security Agency Service: Service tax confirmation upheld with interest: Penalty under Section 78 set aside as no fraud, willful mis-statement alleged in the notice: Penalty under Section 75A and 77 confirmed.

     

  • STO 2012 CESTAT 601
  • Security Agency Service: Appellants already been issued show cause notice for non payment of service tax cannot plead ignorance of law: Penalties justified: Appeal rejected.

  • STO 2012 CESTAT 467
  • Security Services: Appellants not a commercial concern: Object of the corporation was to provide welfare and economic upliftment of ex-servicemen in the State of Himachal Pradesh and functions of the corporation was enumerated in section15 of the aforesaid enactment: During disputed period appellants not liable to pay tax. 

  • STO 2011 CESTAT 209
  • Service Tax: Security Agency Services: In this case the service tax liability and interest have has been discharged, though not by the service provider but by the person who received the service. Since all duties have been remitted into the treasury as per submission of the Appellant the related demands made in the impugned order is waived. (para 10)

    Service Tax: Penalty: Section 80: Further invoking the provisions of section 80 of the Finance Act, 1994 drop all penalties imposed in the impugned order. (para 10)

    Service Tax: Interest: It is also made clear that if the interest as applicable is not paid the department can recover it from the Appellant after giving him notice and opportunity to provide evidence, if any. (para 11)

  • STO 2011 CESTAT 126
  • Service Tax: Security Agency Services: Cenvat Credit: Input Services: The security services used in the saltpan though belonging to the respondents are clearly outside the factory premises as recognized under the central excise law. In view of the specific exclusion of salt pan from the definition of the term factory which definition is applicable to the Cenvat Rules, the security services which are area specific cannot be treated as input services. (para 6.3)

    Service Tax: Input Services: Salt is subject to 'nil' rate of duty. Therefore, other independent suppliers of salt cannot avail credit of security services utilized in their saltpan. (para 7)

    Service Tax: Security Agency Services: Cenvat Credit: Limitation: Penalty: The belief of the respondents that they were eligible to take credit of service tax paid on security services utilized in a captive saltpan cannot be treated as other than bonafide belief. Therefore, no demand can be sustained invoking the extended period and further penalties are not justified. (para 8)

  • STO 2010 CESTAT 661
  • Service Tax: Security Agency Services: Remand: In the absence agreements relating to the amounts payable and received and in the absence of supporting documents, mere submission of statement cannot be said to be sufficient. However since even the statement given by the appellant has not been got verified and even the show cause notice also as mentioned above recognizes the fact that appellant was providing different types of services, this is a matter which is required to be verified since it has an implication in the quantum of service tax payable. The impugned order is set aside and the matter is remanded to the original adjudicating authority (para 3,4).

  • STO 2010 CESTAT 427
  • Service Tax: Security Agency Service: Bills issued are shown to have been raised for housekeeping and providing manpower on contract and there is no mention of security service. No evidence that appellant has provided security agency service has been gathered either in the form of inculpatory statement of the service provider or the received or in the form of any documents. The whole case is built on the assumption and presumptions. Just because the appellants obtained PF registration for a security service, they cannot be made liable to pay service tax. Appeal is allowed.

  • STO 2010 CESTAT 333
  • Service Tax: Security Agency Services: Pre-deposit: There is no evidence on record to show that the appellants have provided Security Agency Services to the client. On the other hand it stands cleared from the client that the services provided to them were not security services but the house keeping or man power supply services. The applicants have been able to make out prima facie case in their favour so as to allow the stay petition unconditionally. (para 4)

  • STO 2010 CESTAT 255
  • Service Tax: Security Agency Service: Pre-deposit: Board constituted under the Maharashtra Private Security Guards (Regulation of Employment & Welfare) Act, 1981 is prima facie not coming within the definition of `security agency' inasmuch as it does not appear to be a commercial concern. In the result, there will be waiver of pre -deposit and stay of recovery in respect of the service tax amount interest thereon and penalties. (para 7,8)

  • STO 2010 CESTAT 311
  • Service Tax: Security Agency Services: Tax paid before issue of Show Cause Notice: Penalty revised during revisionary proceedings by Commissioner: The Assistant Commissioner did not find fraud, suppression of facts, willful mis-statement, etc. with intend to evade payment of the impugned tax on the part of the appellant. In the circumstances, it cannot be held that the penalties imposed by the Assistant Commissioner were not adequate and proportionate to the gravity of the offence committed by the appellants. Enhancing of penalty by the Commissioner in revisionary proceedings is not sustainable. The impugned order is set aside and the order of the Original Authority is restored. (para 5,9)

  • STO 2010 CESTAT 181
  • Service Tax: Security Agency and Housekeeping-cleaning services: Penalty: The appellant is providing services to the International Organizations, which fact is accepted by the lower authorities and was entitled to the exemption, which stand denied only on the ground that certificates showing providing of services to the International Organization have not been produced. No justification for imposition of penalty and accordingly, penalty set aside. (para 4)

  • STO 2010 CESTAT 247
  • Security Agency Service: Commissioner (A) having passed non speaking order: Matter remanded back.

  • STO 2010 CESTAT 126
  • Security Service: Valuation: Staff salary and other infrastructural expenses are not required to be added in the assessable value of services. However, as it is not challenged the, Service Tax demand is confirmed.

    Security Service: Penalty: The matter being a pure question, of interpretation of law and the figures having been reflected in the balance sheet, no malafide can be attributed to the appellant so as to invoke penal provisions. Accordingly, penalty imposed is set aside.

  • STO 2010 CESTAT 128
  • Security Service: Absence of Investigation: The invoices in respect of which the Service Tax has been demanded, does not show what is the nature of service. No investigation whatsoever has been conducted as to determine the nature of service. Lower authority has chosen to presume that security service has been rendered since the appellant have registered themselves with PF department as security agency service provider. In the absence of any investigation done by the department and in view of the evidence provided by the appellant, demand of Service Tax and penalty is set aside.

  • STO 2010 CESTAT 127
  • Security Service: Penalty Set Aside: Taking note of the fact that the appellant is proprietary firm and the total amount liable to be paid is Rs. 1,70,930/- for the period of more than 3 years and the appellants obtained the registration voluntarily as well as paid the service tax and interest without waiting for issuance of show cause notice. Lenient view is required to be taken in this case as per the provisions of Section 80 of Finance Act, 1994. Penalties are set aside.

  • STO 2010 CESTAT 111
  • Security Agency Service: Stay: Appeal disposed of by directing the appellant to pay the remaining amount of service tax: Commissioner (A) would thereafter decide the main appeal on merits.

  • STO 2010 CESTAT 70
  • Security Agency Service: Penalty u/s 76: Service tax along with interest paid before issuance of show cause notice : Penalty u/s 76 has to be upheld as provisions of sub-section (3) of section 73 not applicable to cases involving fraud, willful mis-statement, suppression of facts, etc in terms of sub-section (4).

  • STO 2009 CESTAT 957
  • Service Tax: Service of security agency: Scope and liability: As per the provision of Finance Act, Security, agency means any commercial concern engaged in the business of rendering service relating to the security of property whether movable or immovable or of any person, in any manner including the service of providing security personnel. As per the terms and conditions of tender and acceptance letter and invoices raised Applicants provided watch and ward personnel i.e. Security Guards and these are to be deployed at the stations as well as other installations of Kolkata Metro. The Applicants had not pleaded any financial hardship and also had not made out a case for total waiver of Service Tax(Para 6).

    Pre-deposit ordered.

  • STO 2009 CESTAT 966
  • Service Tax: Security agency service: Scope: Commissioner (Appeals) dismissed the appeal on the ground that it is not denied by the appellant that they collected Service Tax under the category of Security Agency Service. The correspondence as produced indicate that the Oil India Ltd. had not paid any service tax to appellant in respect service provided. The Commissioner (Appeals) has not gone into the issue whether the appellants are providing service of security agency as per the various contracts. In these circumstances the impugned order is set aside and the matter is remanded to the Commissioner (Appeals) to decide afresh(Para 5).

    Appeal disposed of by way of remand.

  • STO 2009 CESTAT 768
  • Fundamental Flaw: It is a fundamental flaw which vitiated the entire proceedings. The demand of service tax is found to have been confirmed under section 66(1) of the Service Tax Act.1994. Firstly there is no Act called Service Tax Act, 1994; as regards Section 66(1) of the Finance Act, 1994 is concerned the same is the charging section and does not contain machinery for recovering tax not paid.

  • STO 2009 CESTAT 817
  • Security Agency Service: Penalty: The appellants provided helper and gunman to the BSNL. There is no material placed by the appellant that the security men were used for other purposes. So, the demand of tax along with interest is upheld, there is no mala fide on the part of the appellant accordingly, the penalties are set aside.

  • STO 2009 CESTAT 269
  • Cum Tax Value: In cases where an assessee providing taxable service charged the gross value without indicating the service tax element separately, the taxable value realized has to be treated as inclusive of service tax due. This principle applied to cases even before an explanation to Section 67 was introduced to remove the doubts in this regard.

  • STO 2009 CESTAT 371
  • Service Tax: Security services: Invocation of larger period: Scope: In respect of some parties, the demand confirmed is for period beyond 5 years which is not permissible. The amount of service tax collected should be treated as cum-tax value and this has not been allowed at the earlier stages. Major Rana, Proprietor, expired on 29.5.2005 though the show cause notice was issued on 19.05.2005, and the Adjudication Order was passed on 18.08.2006, thus taking note of the fact that the Proprietor was no more, accordingly, the penalties are set aside. Matter remitted for reconsiderarion.

    The appeal is disposed of in the above terms.

  • STO 2009 CESTAT 256
  • Service Tax: Security services: Demand: Penalty u/s 76,77,78: Even though the appellant discharged the service tax liability only after the issue of show cause notice. The appellant paid the service tax out of his pocket as the amount was not at all collected from the clients. It is seen that they had not collected any service tax from their clients. Therefore, this case requires a sympathetic consideration. In these circumstances, the impugned order is modified to the extent of reducing penalty amount under Section 77 and 78 and set aside penalty u/s 76.(Para 7).

    Appeal allowed.

  • STO 2008 CESTAT 297
  • Stay: Security Agency Service: In the first round of litigation, the appellants had made pre-deposit of Rs.2.00 lakhs, treated as sufficient compliance. On merit the appellants are liable to pay service tax even though not collected from the service receivers. However, looking to their conduct of paying the entire amount of service tax with interest, penalty under section 76 reduced and penalty under section 78 set aside.

  • STO 2008 CESTAT 99
  • Security Service : The appellants were under the bona fide belief that the reimbursement of the salary of security person was not liable to service tax. They argued that they have not collected the service tax from their clients and the amount received on account of salary has been paid to the personnel. Prima facie case on merit not made out.

  • STO 2008 CESTAT 177
  • Stay: Admitted liability of Rs. 28.21 lakh already deposited. As regards the balance amount, waiver sought on the ground that certain elements are not includable. However, the exact amounts which are liable for deduction have not been worked out by them. They have filed Income Tax returns to show that they are faced with severe financial hardship. Taking into consideration the overall facts and circumstances of the case, the appellants directed to pre-deposit an amount of Rs. 10,00,000/-.

  • STO 2007 CESTAT 1352
  • Security Service: Stay: On the plea of limitation and the fact that the applicant is a co-operative society which is set up for the welfare of the Ex-servicemen and is a non commercial organization providing security services and also in similar case the Tribunal had already granted full waiver. Full waiver granted to the applicants.

  • STO 2007 CESTAT 1134
  • Stay: Security Agency Service: From the aims and objects of the Society it is found that the same is for welfare of war widows and Ex-service men. Hence, prima facie case made out. Full waiver.

  • STO 2007 CESTAT 435
  • Service Tax: Services of security agency: Penalties u/s 76,77,78: The appellants was providing the services of security agencies. The appellants had on being pointed out paid the entire service tax liability or the period April 2002 to March 2003. Though, the show cause notice proceeds on the ground that the appellant has concealed actual receipt against the services for the estimated period, the demand has taken place for the entire amount of service tax for the period earlier to March 2003. There is no confirmation of demand or allegation that the appellants had suppressed the value of the services provided by him subsequent to his taking out the registration in April 2003. The revenue is also not in appeal against the such finding. As regards the penalties imposed under Section 76 & 77, the provisions are squarely applicable in this case. As regards the penalty imposed under Section 78, it is seen that the appellants have been canvassing that they were not aware of the provisions of Service tax and that they were not guided properly by the Consultant and they were under the impression that the service tax liability for the earlier period has to be paid as and when the payment for the services rendered are received. The appellants had not approached the revenue for any classification. The revenue officers have also not taken any action against the appellants having granted him the Service tax registration in April 2003, in any way, as to asking him the details of transactions made by them prior to April 2003. Misguidance by the Consultant on the provisions of the law, may be the cause of non-payment of the tax liability, which can be condoned. In view of above findings the appellants have made out a strong case for invoking the provisions of Section 80, of the Finance Act, 1994 for setting aside the penalty imposed under Section 78 on them.(Para 7,8,9).

    Appeal partially allowed.

  • STO 2007 CESTAT 482
  • Service Tax: Security agency service: Demand based on balance sheet figures: It is the department's case that the appellants had rendered service to TANSI and TANCEM. It was possible to make a proper verification as regards the services rendered by the appellants and gross amounts collected by them instead of going by the income-tax records which they had never admitted to be correct and had claimed to have been made for the purpose of obtaining a bank loan. TANSI and TANCEM being government concerns, it should have been possible for the assessee also to establish with records, the taxable amounts received by them if their claim were correct. In the circumstances, the matter is remanded to the original authority for examining their claim as regards the exemption in terms of Notification No. 56/98-ST dated 7-10-98. (Para 5).

    Appeal is allowed by way of remand.

  • STO 2007 CESTAT 448
  • Service Tax: Security services: Demand: The appellant had providing security services right from 1994. Hence, the appellant was liable to pay the service tax from 16-10-1998 i.e. from the date the service tax was leviable. At the time of taking out the registration, the appellant failed to pay service tax on his past liability. Not only that, he also did not disclose the full value of the taxable services received for the period subsequent to taking of the registration till 31-12-2002. The appellant suppressed the value of taxable services and other relevant facts from the department. Hence, they are also liable for penal action under Section 78 of the Finance Act, 1994. Pre-deposit of remaining amount ordered(Para 1,3,4).

    Appeal disposed of.

  • STO 2007 CESTAT 417
  • Service Tax: Security services: Composit service: Scope: The major service done by the appellant is 'Management of Immovable Properties'. The appellants have been filing return regularly. The Revenue initiated proceedings for recovery of service tax under the category of 'Security Agency'. The 'security agency service' is a part of services done by them under 'Property Management Services'. In terms of the Board's Circular No. 334/4/2006-TRU dated 28-2-2006 which clarifies that a composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service and accordingly classified. Therefore prima facie the appellants have strong case on merit.(Para 3).

    Pre-deposit waived, stay allowed.

  • STO 2007 CESTAT 469
  • Service Tax: Security services: Penalty: Both the service provider and service receiver are in remote area. Looking into the entire background of the appellant, it appears that it is basically out of ignorance of newly introduced law, the appellant has not fulfilled his obligations. The demand of duty relating to four years comes to about Rs. 32,000/- which is indicative of the smallness of the operation. This really is a deserving case for applying the leniency provided under Section 80.(Para 4).

    Penalties waived.

  • STO 2007 CESTAT 476
  • Service Tax: Security service: On going through the terms of the agreement, it is abundantly clear that besides guarding and manning of the exchanges offices and operating the generator, security service in the nature of providing guards with guns was to be provided which is evident from clauses of the agreement. Moreover, as per clause 13 of the agreement any State/Central Excise tax applicable was to be deducted from the bill of the contractor. The BSNL sent a reply to the appellant, copy of which is on record, which referred to the letter of the appellant in which Service tax, interest, penalty were claimed, stating that ".........BSNL has already made ....... full and final payment of the security service provided by the appellant, as per agreement." It was stated that no further payment was admissible as demanded by the appellant. Thus, even according to the BSNL, security service was provided to it by the appellant. The appellant has, therefore, not made out any case for total waiver of pre-deposit.(Para 3,4).

    Pre-deposit ordered.

  • STO 2007 CESTAT 132
  • Service Tax: Security services: Demand: Commissioner (Appeals) has held that "the department has failed to bring on record evidence of realisation of the billed amount on which the service tax demand has been confirmed and penalty imposed." Thus the Commissioner (Appeals) has reduced the service tax liability. As against this observation the Revenue has filed an appeal in which they have relied upon the certificates issued by MSEB and by the Central Railway Divisional Office to submit that the appellant had suppressed the value of the services provided by them in order to evade the service tax.(Para 3). Such certificates were given in the month of February, 2006 whereas the adjudicating order was passed by the adjudicating authority on 24-3-2005 and by the Commissioner (Appeals) on 30-11-2005. It is well settled law, that an appeal, if any, has to be on the same set of documents which were on record at the time of adjudication. It is not open for the Revenue to prefer appeal on the strength of fresh evidence, which were collected subsequent to the adjudication order and after the first appellate proceedings.(Para 6).

    Revenue appeal dismissed.

  • STO 2007 CESTAT 402
  • Service Tax: Business Auxiliary Services: Supply of personnel cannot be considered as an activity of promotion or marketing or sale of goods as defined under the term "Business Auxiliary Services".The appellants have pleaded time-bar. The appellants were covered already under the service tax and all the details had been furnished to the department. Therefore, prima facie appellants have a strong case for seeking waiver. (Para 3).

    Pre-deposit waived, stay allowed.

  • STO 2007 CESTAT 483
  • Stay: Entire service tax amount has been paid before the adjudicating authority passed the Order-in-Original. Hence the stay application is allowed by granting waiver of pre-deposit.

  • STO 2006 CESTAT 692
  • Service Tax: Security services: Penalty u/s 76,77: Strangely from the month of October, 2001 to March, 2003, they did not pay Service tax nor they filed the return despite knowing the provisions of law. The learned Commissioner (Appeals) was correct in coming to the conclusion that the appellant has failed to show any reasonable cause and they are not eligible to get the benefit.(Para 5).

    Appeal dismissed.

  • STO 2006 CESTAT 215
  • Service Tax: Security Services: Penalty u/s 76,77: In the guise of rectification of mistake, the entire complexion of the order cannot be altered under Section 74 of the Finance Act. In fact, if the order of the lower authority is not legal and proper, there is a provision under Section 84 of the Finance Act for exercise of Revisionary power by the Commissioner. That would have been the proper course of action. In any case, when the liability was pointed out to the appellant, the tax was paid even before the issue of Show Cause Notice. This Bench, in several cases, has taken the view that if the duty liability is discharged before the issue of Show Cause Notice, no penalty and interest can be levied. Following the above ratio, levy of equal penalty and interest is set aside.(Para 6).

    Appeal allowed.

  • STO 2006 CESTAT 646
  • Security Agency: Appellant though registered as Corporation under Punjay Ex-Serviceman Act, 1978, has rendered commercial activity of Security Agency, hence, liable to pay service tax on the gross amount received by it from the receiver. No abatement is admissible except Government taxes and levies if proved to be connected with the service.

  • STO 2006 CESTAT 327
  • Service Tax: Security services: Penalty u/s 78: During the relevant time of the visit of Central Excise authorities nothing was concealed or suppressed and the department ought to have taken this into account. Before imposition of penalty under Sec. 78 the concurrence of the Commissioner was mandatory and there is no indication either in the show cause notice or in the order-in-original that such concurrence has been obtained. Penalty u/s 78 is harsh (Para 3,5).
    Revenue appeal dismissed.

     

  • STO 2006 CESTAT 794
  • Service Tax: Security services: Liability: Appellants have not collected any Service Tax under the category of Security Services. Appellants engaged four personnel who were utilized for maintenance, housekeeping and gardening job and only one person was used for Security Services.(Para 1).
    Pre-deposit waived, stay allowed.

  • STO 2006 CESTAT 691
  • Service Tax: Security service: Penalty u/s 76: The appellants were aware of the provisions of the Finance Act but still chose not to deposit the service tax amount within due date. The reasons given are that the proprietor was not well and was suffering from Hypertension and Diabetes. This cannot be a reason for non-deposit of the service tax. The appellants have not made out a prima facie case for complete waiver(Para 2).

    Pre-deposit ordered.

  • STO 2006 CESTAT 618
  • Security Agency Service: Security is provided through manual guard. In such a system, the wage of the security guard is the basic cost. The appellant was also charging the recipient of the security service for the cost of security guard as well as PF, ESI payments. Even provision for ESI, PF would not be eligible for deduction. However, appellant eligible for benefit of treating the entire value taken as the value including service tax, hence, recomputation of service tax required.Section 80 not invocable, as there was no case of misunderstanding. However, penalty under section 76 reduced to Rs.100/- per day.

  • STO 2006 CESTAT 760
  • Service Tax: Security services: Valuation: They are not liable to pay service tax on the salary paid to the guards who were placed in the temple premises. Bench comprising of Hon'ble President in the case of New Industrial Security Force v. CCE, Kanpur [STO 2005 CESTAT 139] has prima facie taken a view that salary payable to security personnel stands on a different footing than services provided by security agency to procure security personnel for the clients. Prima facie merit has been found in the arguments(Para 3).
    Partial pre-deposit ordered.

  • STO 2006 CESTAT 238
  • Service Tax: Security Agency: Demand: Time bar: The demand raised is time-barred as the relevant date for the purpose of importation as per Section 73(b) was the date 'for' filing the returns and this was subsequently changed to the date 'of' filing return. Prima facie the applicants are entitled to the benefit of Notification No. 56/98-ST, as they had also rendered services for security of movable property and if this is taken into account the demand is prima facie not sustainable.(Para 2,3).
    Pre-deposit reduced.

  • STO 2006 CESTAT 544
  • Security Agency: Stay: service tax is to be charged on the gross amount recovered for providing the service as service charges and not on the salaries and other benefits payable to the employees and recovered from the client by the security agency.

  • STO 2006 CESTAT 391
  • Service Tax: Security Agency: Demand: Appellant has not challenged the imposition of the tax but has tried to seek relief by resorting to the technicality that the show cause notice was not issued in time. The officers of the department had collated information about non-payment of the service tax by the appellant from the information supplied by the receiver of the services of the appellant. The appellant should have come forward and declared the receipt of the amount and sought to clarify that there are discrepancies. Appellant has not made out a case in his favour on any counts.(Para 5).

    Appeal dismissed.
     

  • STO 2006 CESTAT 465
  • Service Tax: Security service: Penalty: In the present case, there is violation on the part of the appellants as certain elements which have been omitted ought to have been included in the payment of Service tax. The orders of the lower authorities are legal and proper. However, penalties are reduced(Para 7)

    Appeal disposed off.
     

  • STO 2006 CESTAT 751
  • Service Tax: Security services: Penalty u/s 76,77: Since the Commissioner (Appeals) has overlooked the distinction between a mere sanction for payment of the amount to the appellant and receipt of such service tax amount from M/s. Northern Coalfields Ltd., it would be appropriate to remand the matter to the Commissioner (Appeals) to ascertain as to when the actual payment of service tax was received by the appellant from M/s. Northern Coalfields Ltd. and on that basis to work out the liability of the appellant for the period subsequent to October, 2002 in the light of the provisions of Section 80 and make a fresh order(Para 6)
    Appeal partially allowed.

     

  • STO 2006 CESTAT 572
  • Service Tax: Security agency services: Taxable value: Scope and liability: The Adjudicating authority has relied on a letter dated 14-05-2004 from the Executive Engineer, Bagalkot which was not supplied to the appellants. This is a gross violation of the Principles of Natural Justice. All the case-laws cited by them are relevant. It is not the case that the Work Done Certificate is forged. The Executive Engineer himself, in his letter dt 14-05-04 stated that other works like switching ON & OFF operations of pumps of water supply installations, switching ON & OFF operations of street-light control points and other petty repairs like replacement of blown off fuse wire, etc., along with the watch and ward works were entrusted to the personnel supplied by the appellants. He confirmed the issue of Work Done Certificate. The Bills/Pre-receipts issued also indicate the service rendered(Para 5).

    Appeal allowed.
     

  • STO 2006 CESTAT 738
  • Service Tax: Security agency: Scope and liability: According to definition of security agency in the service tax law, only commercial concerns are within the ambit of service tax. Appellant is a welfare cooperative society for ex-servicemen and its effort is to keep ex-servicemen employed. Profit is not the motive and they are also not allowed to pay any tax, in view of decision of the Bangalore Bench of this Tribunal in the case of Kerala State Ex-Service League v. CCE, reported in STO 2004 CESTAT 153(Para 2,4).
    Pre-deposit waived, stay allowed.

  • STO 2006 CESTAT 711
  • Service Tax: Security Agency Service: Applicant is not disputing that they had provided Security Agency Services to M/s. BSNL during the relevant period. The Security Agency Services is liable to pay Service Tax w.e.f. 16-10-1998. In these circumstances, Prima facie, it is not a fit case(Para 3).

    Pre-deposit ordered.

  • STO 2006 CESTAT 78
  • Security Agency: gross amount charged by such agency from the client is relevant for calculating the service tax.

  • STO 2006 CESTAT 710
  • Service Tax: Security services: Waiver of pre-deposit and stay: Three opportunities for personal hearing were extended to the assessees but they did not avail of any one of them, they did not apply for modification of the order dated 31-1-2005 and then did not comply with the pre-deposit requirement.(Para 3).

    Pre-deposit ordered.

  • STO 2005 CESTAT 125
  • Service Tax: Security services: Demand and penalty: Letter referred to by the Commissioner (Appeals) in the order has not been provided to the appellant. There is a clear violation of Principles of Natural Justice. The alleged evidence quoted by the Revenue is not placed before the bench. On the basis of the records, the appellants have shown that what they have collected was not for providing services of Security Agencies. The appellants have made out a strong prima facie case in their favour.(Para 4)

    Pre-deposit waived
     

  • STO 2005 CESTAT 102
  • Stay Not Granted: As the applicants are providing security service which is not disputed by the appellant. The applicants had not pleaded any financial hardship. No reason to waive the pre-deposit of the service tax.

  • STO 2005 CESTAT 158
  • Service Tax: Security services: Waiver of pre-deposit: As applicant has already deposited Rs. 7 lakhs at the time of hearing of the appeal by the Commissioner (Appeals) is sufficient for hearing of the appeal.(Para 2).

    Pre-deposit waived.
     

  • STO 2004 CESTAT 153
  • Security Agency: The only ground given by both the authorities is that appellants are making bids, and filing tenders and on that ground it has been held to be a commercial activity. In terms of the two Supreme Court judgments cited, the authorities are required to see as to whether the appellants are making profits as a business concern.

  • STO 2001 Mad 190
  • Constitutional Validity: Security Services: Expenditure incurred not being given deduction from taxable value: Held: No fault can be found with the taxing provision with reference to the measure of the tax. Which would be and what would be the deductible amount would essentially depend upon the words of the statute and that it would be open for the tax payer to prove on the basis of the evidence that the amount charged would not come within the gross amount charged or any amount charged would be actually separate and independent of gross amount charged and not in relation to services provided. It would be the discretion of the concerned authority to decide as to what are the deductible amounts and which are the others and it could not be decided as to whether a taxing statute is constitutional or otherwise on the basis of the way the calculations are to be made by the taxing authorities. Indeed a nature of the tax cannot be ascertained on the basis of its measure and this proposition is well settled. Even otherwise, the question raised regarding the calculation of the tax would not be apposite to decide the constitutional validity of the provisions much less under Art. 14 of the Constitution of India.

     
     

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