TaxTMI 
TaxTMI 
2026 (1) TMI 578
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....d the order dated 30.8.2019 passed by the Additional Commissioner confirming demand of service tax of Rs. 1,04,68,524/- under section 73 (1) of the Finance Act, 1994 [Act] and imposed a penalty of Rs. 10,46,852/- under section 76 of the Act and rejected the appellant's appeal. 2. We have heard learned counsel for the appellant and the learned authorized representative for the Revenue and perused the records. The demand of service tax has been confirmed on three counts: a) Demand of service tax under reverse charge basis on the amounts which the appellant had paid to the State Police Department for the security services provided by the police; b) Service tax on vendor registration charges, tender cost, inspection ch....
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....Appellant, and therefore, such activities do not qualify as 'sovereign function'. Accordingly, the Appellant has received support services from the State Police Department and has reimbursed the salaries and allowances of the officers to the Police Department. The amounts reimbursed is taxable in the hands of the Appellant on reverse charge basis. The sovereign activities assigned to the State Police Authority are to protect life and property without consideration. Ajmer Discom has been created for distribution and supply of electricity. The State Police Department has rendered services on the request of the Appellant and has received fees which is prescribed by the Directorate General of Police. Such services are not covered under so....
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....llected towards agreeing to the obligation of tolerating an act or situation, and therefore are taxable in terms of Section 66E(e) of the Act. That by tolerating the resignation of employees prior to their term and compromising on the terms and conditions of the tender / work order, the Appellant has rendered the service of agreeing to tolerate an act or situation. Accordingly, the amounts received by the Appellant were taxable under Section 66E(e) of the Act. XXXXXXXXXXXXX 12. We find that the main contention pertains to demand of service tax of Rs. 2,43,67,998/- under support service. The said demand has been raised on the appellant under reverse charge mechanism as the period involved in this matter is from July 2012....
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....ve held since the term "business concern" in the definition of "Security Agency Service" has been replaced with "any person" even the Police are covered under the "Security Agency Service". A perusal of the definition of "Security Agency" shows that it has to be "any person engaged in the business of providing security". Police provide security as a part of their statutory obligations. In most cases they do not charge any fee for such security but in some cases they charge a fee as determined by the State Government. Merely because they are charging 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 s....
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....and is set- aside. 13. With regard to amount collected by the appellant on account of inspection charges, tender cost and vendor registration charges, we find that the activity of meter inspection charges is related to the distribution of electricity of the appellant and the said activity is exempt from payment of service tax, in that circumstances, on inspection charges of the electric meter, the appellant is not liable to pay service tax. Accordingly, the said demand is also set-aside. 14. With regard to vender registration charges and tender cost, these are the charges recovered by the appellant from persons who are getting registration and a part of bidding process that cannot be termed as any service provided by the a....
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.... employment. Hence, amounts so paid would be chargeable to service tax However any amount paid for not joining a competing business would be liable to be taxed being paid for providing the service of forbearance to act." Therefore, we hold that the appellant has received tender cost for non-fulfilment of conditions of tender which is towards the said amount is collected for damage or loss incurred by the appellant and not for providing any service, in that circumstances no service tax can be demanded from the appellant by invoking the provisions under Section 66E (e) of the Act. 16. With these terms, we pass the following order:- (a) demand under support service amounting to Rs. 2,43,67,998/- is set-aside ....