TaxTMI 
TaxTMI 
2014 (1) TMI 361
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....ssee demanding duty on the gross amount received. The details were taken from the balance sheet, the demand was for the period 2002-03, 2003-04 & 2004-05. The demand notice was issued on 17.4.2006. The assessee contested the demand. However, the original adjudicating authority confirmed the demand. During the adjudication proceedings, the assessee claimed that he is only a supplier of labour/manpower and is a labour contractor and liable to pay the service tax only on the value of the service amount retained by him. Assessee also claimed that he is not providing any security service. He also contested the valuation method adopted by the department. Adjudicating authority however rejected these contentions and considered the services provided s the security services and held that the gross amount collected from M/s. BSNL which includes the salary of the guards would be taxable value for service tax purpose. Assessee filed appeal before Commissioner (Appeals) who vide impugned order rejected the assesses contention relating to the classification of the service and held that the service provided by the appellant are security services. However, Commissioner (Appeals) agreed to the asse....
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....ional Detective & Sec. Ser. P. Ltd. Vs. CCe, Guntur- 2008 (12) S.T.R. 79 (tri-Bang).- Final Order NO 570/2008 dt. 7.5.2008 in Appeal NO. ST/115/2007 [v] Hon. Punjab-Haryana High Court CUSAP No19 of 2009 date of decision 14-12-2009 [vi] Hon. Patna High Court Miscellaneous Appeal No. 535 of 2009 Commissioner of C.E. Patna Vs. M/s. Nirman Cement Ltd. Anr. [vii] 2007 (5) S.T.R. 280 (Tri.Mumbai) Commissioner of C.E. Pune II vs. Kirloskar Ebara Pumps Ltd. [viii] 2007 (6) S.T.R. 314 (Tri-Mumbai)-Karnik Maritime Pvt. Ltd. Vs. Commissioner of C. Ex. Mumbai I. 4. We have also heard Ld. AR on the various issues. Ld. A.R. stated that Commissioner (Appeals) has already upheld that assessee is providing security agency services and in the said service wages/all payments made to Security Guards will form part of assessable value. Learned A.R. quoted the following case laws: [i] Premier Security Enterprises Vs. Commissioner of C. Ex & Cus., Patna 2009 (15) S.T.R. 735 (Tri-Kolkata) [ii] Punjab Ex-Servicemen Corpn. Vs. Commr. of C. Ex., Chandigarh 2009 (13) S.T.R. 539 (Tri-Del) [iii] Sudharson Security....
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....he Finance Act, 1994, we have no doubt that the service provided by the assessee is that of security agency. We therefore reject assessees' appeal on this aspect. 6. As far as the second issue relating to valuation is concerned, we find that issue relating to the valuation in respect of security agency have been discussed in number of judgment of this Tribunal as also various High Court's. It would suffice to quote judgement of Kerala High Court in the case of Security Agencies Association vs. Union of India reported in 2012 (28) STR 3 (Ker)., Hon'ble High Court in the said judgment has observed as under: 8. Security agencies were brought within the Service Tax Net for the first time, as per the Finance Act, 1998, w.e.f. 16-10-1998; though another class, 'Man Power Recruitment Agency' separately defined under Section 65 was already brought under the net as per the Finance Act, 1997 (Act No. 26 of 1997) w.e.f. 7-7-1997. Section 65(94) of the Finance Act defines the term, 'Security Agency' as follows : "'Security Agency' means any commercial concern engaged in the business of rendering service relating to security of any property, ....
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....tters for the Government to decide, as a measure of policy. It is in furtherance of the said policy, that the law has been enacted by the Parliament by virtue of the power conferred upon it as per the residual entry, i.e., Entry 97 of List I of the Seventh Schedule. The law having been enacted as above, it stands beyond the scope of challenge, with reference to the measure of taxation. It has been specifically observed by the Apex Court in T.N. Kalyana Mandapam Assn. v. Union of India and Others, (2004) 5 SCC 632 (paragraph 46) = 2006 (3) S.T.R. 260 (S.C.) = 2004 (167) E.L.T. 3 (S.C.) that it is well settled that the 'measure of taxation' cannot affect the nature of taxation and therefore, the fact that service tax is levied as a percentage of the gross charges for catering, cannot alter or affect the legislative competence of the Parliament in the matter. As such, there is not much pith or substance in the vague challenge raised by the petitioners herein. 11. The correctness and sustainability of 'fixation of service tax' with reference to 'Gross income' of the Advertising Agencies in the State of Tamil Nadu, without excluding the expenditure part, while extending su....
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....of its provisions. A Legislature does not, as an old saying goes, have to tax everything in order to be able to tax something. If there is equality and uniformity within each group, the law would not be discriminatory. The Legislature can exercise an extremely wide discretion in classifying item for tax purposes, so long as it refrains from clear and hostile discrimination against particular persons or classes." This Court finds that the decision rendered by the Madras High Court, as above, is on the point, as to the issue involved in these writ petitions as well. As such, this Court holds that the issue cannot be answered in favour of the Revenue, especially on the question of law. 12. As observed by the Apex Court in T.N. Kalyana Mandapam Assn. v. Union of India and Others, (2004) 5 SCC 632 = 2006 (3) S.T.R. 260 (S.C.) = 2004 (167) E.L.T. 3 (S.C.) Service tax is an indirect tax and the role of the service provider is only to have it collected on behalf of the Revenue. The service provider is expected to collect it from the client. The observations of the Apex Court in this context are worthwhile to be noted, as extracted below : &nbs....
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....nbsp; 14. The contention of the petitioners that they are virtually 'Man Power Recruiting Agents' and that their service is to be valued on the quantum of the commission they receive is wrong and unfounded. As mentioned hereinbefore, Man Power Recruiting Agency service is a separate entity which was brought within the Service Tax Net w.e.f. 7-7-1997 as per the Finance Act, 1997, whereas the Security Agency Service was brought in for the first time only w.e.f. 16-10-1998, as per the Finance Act, 1998. Both the above terms have been separately defined under Section 65. In the case of the latter, the Security Agency is the 'Employer' of the security personnel deployed to cater to the requirements of the service receivers, for which the service receivers effect the payment to the service providers, as per the terms of the contract. The 'Master and Servant relationship is between the Security Agency and the Security Personnel engaged and not between the Service Receivers and the Security Personnel. The service providers like the petitioners are very much authorised and entitled to pass on the liability towards salary and statutory payments to the 'Service Receivers' by raising the Bills....