Statutory police deployment is a sovereign function, not Security Agency Service, so no service tax applies.

Deployment of additional police personnel under statutory notifications was treated as a sovereign function for public security and maintenance of public order, not a commercial security service. Because the charges were fixed by notification and credited to the Government treasury, the activity did not satisfy the definition of Security Agency Service under the Finance Act, 1994. No service tax was therefore leviable on the amounts collected for such deployment, and the demand was held unsustainable.

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Issues: (i) Whether deployment of additional police personnel on payment under statutory notifications amounted to providing Security Agency Service under the Finance Act, 1994 and attracted service tax.

Analysis: The police department's activity was undertaken under the statutory power to deploy additional police force for public security and maintenance of public peace or order. The charges were fixed by statutory notifications and the amounts collected were required to be credited to the Government treasury. On these facts, the activity was treated as part of the State's statutory function and not as a commercial security service rendered by a person in the business of security agency services.

Conclusion: The activity did not fall within the definition of Security Agency Service and no service tax was leviable on the charges collected for such deployment.

Final Conclusion: The impugned demand was unsustainable, and the appeals succeeded.

Ratio Decidendi: An activity performed by the police under statutory authority, with charges prescribed by notification and credited to the treasury, is a statutory sovereign function and not a taxable security agency service.

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