TaxTMI 
TaxTMI 
2018 (4) TMI 418
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....ervice tax on the charges recovered by them for providing security on the ground that they are liable for service tax under the category of "Security Agency Services". The demand was confirmed by the adjudicating authority alongwith interest and penalty u/s 76, 77 and 78 were also imposed. Hence the present appeal. 2. Shri S.S. Gupta, ld. CA appearing for the Appellant submits that the police is deployed to individuals or to places for the purpose of maintaining law and order. That they perform sovereign functions as held in case of Dy. Commissioner of Police, Jodhpur 2017 (48) STR 275 AND Dy. Inspector General of Police 2017 - 11-TMI-346 and thus not liable for tax. That no proceedings can be initiated against the Appellant without impl....
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.... 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 ....
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....the Apex Court, it would appear that the Superintendent of Police, which is an agency of the State Govt. does not appear to be covered within the term "person". It is also noteworthy that in the year 2012 when the pattern of levy of service tax was changed and the concept of negative list was introduced with effect from 1-7-2012, a definition was introduced for the term "person" in Section 65B(37), of the Act, which includes the Govt., local authorities, etc. From this, it is evident that such a definition for the term "person" has become part of the statute only from this date. To decide the meaning of "person" up to this date, we will have to refer to the General Clauses Act, 1897 as well as relevant case laws. The Apex Court has clearly ....
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....y 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 categorized as one which is liable to payment of service tax. The circular clarifies that charges recovered by any sovereign/public authority for carrying out any statutory function will not be liable for levy of service tax if all the following conditions are satisfied :- (a) Sovereign/public authorities perform duties which are in the nature of statutory and mandatory obligation to be fulfilled in accordance with the la....
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....." (ii) The fee collected should be levied as per the provision of relevant law. The State Government, in exercise of powers conferred under Section 46 of the Police Act issued two notifications 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 numbe....
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....x can be levied on such fees collected for discharging the sovereign function. The lower authorities have, however, taken the view that the activity undertaken is not in the nature of statutory duty, but an activity undertaken for a consideration which is not a statutory fee. We find ourselves unable to agree to this stand taken by the lower authorities. The police department has the mandatory duty to maintain public peace and order. For such duty, which is in the nature of sovereign function, no charges are recoverable from the citizens. In the present case, the police department has recovered fees for deploying additional police personnel on request. However, the statutory functions of the police of the State Govt. make it explic....