TaxTMI 
TaxTMI 
2019 (11) TMI 250
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....r Section 65 (94) which have been made taxable under Section 65(105) (w) Finance Act, 1994 and had evaded paying service tax amounting to Rs. 16,75,507/- during the period October, 2006 to March, 2011 by contravening provisions of Section 68 , 69 and 70 of the Finance Act, 1994 read with Rules 4, 6 and 7 of the Service Tax Rules, 1994. 2. The Commissioner of Central Excise, Jaipur sought from the DGP Rajasthan details of the security services provided by them and the amounts collected therefor. After examining the information so received, it was felt that the appellant had provided guards to various branches of State Bank of Bikaner and Jaipur(SBBJ) in Sawai Madhopur district and conducted verifications for which he received a sum of Rs. 1....
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.... 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". 6. The service of the Security Agency is made taxable under Section 65(105) (w) of the Finance Act, 1994 which reads as follows; "any service provided or to be provided to any person, by a security agency in relation to the security of any property or person in any manner and includes the service of investigation, detection or verification of any fact or activity". 7. The appellant contested the Show Cause Notice on the ground that the Police Department is not engaged in profit making activities but is mandated by law to provide security to public.....
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....ture of functions in the present case the original authority held that the appellant was liable to pay service tax on the sum received in there for providing guards to the banks under "Security Agency Services". Accordingly, the demand was confirmed along with interest. The first Appellate Authority in the impugned order recorded as follows; 8. Further, I have gone through the Rajasthan Police Act 2007. Section 46 of the Act ibdi reads as "the state government may levy from any person, who carries on any such occupation, gathering, exhibition, sale, entertainment etc for monetary gains, as may, for the purpose of public security or for the maintenance or public peace or order, require deployment of additional police force, such user charg....
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....s case may be decided, accordingly, and their appeal may be allowed. 10. He further argued that in order for this activity to be treated as "Security Agency Service" they should in the first place be a "security agency". Rajasthan Police is not a security agency. It is true that while providing security to some commercial entities such as banks they recover a fee as per prescribed rates and such recovery of the fees cannot be treated as provision of Security Agency Service. He would argue that term Security agency as per Section 65(94) of Finance Act, 1994 means "any person engaged in the business of rendering service relating to the security of any property, whether movable or immovable or any person, in any manner includes services of in....
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....nt Treasury. 12. In their case there is no doubt that the appellant was engaged in the provisions of security as per the statutory obligations. The fee is collected as per Section 46 of the Police Act. The fee so collected is deposited into the treasury of the State Government. Thus, they fulfilled all their conditions and are not liable for payment of service tax. 13. Per contra, learned Departmental Representative reiterates the findings of the lower authorities and asserts that the service tax is payable on the amount received by the appellant for providing security to the banks. He would submit that the Central Industrial Security Force is a Central Police Organisation performing exactly similar functions of providing security to the ....
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....ng a fee, Police do not become "person engaged in the business of providing security". As per clarification issued by the CBEC Circular No. 89/07/2006-ST dated 18/12/2006 charges recovered by any sovereign or public authority for carrying out any statutory function will not be liable for service tax fees if three conditions are fulfilled. 16. The first condition is that the statutory authority must perform a duty which is in the nature of statutory or mandatory obligations to be fulfilled in accordance with law. We have no doubt that the police has a statutory duty to provide security. The Second condition is that the fee should be collected as per law. Section 46 of the Police Act provides for the State Government providing Police Force f....