Charging of Fee by Police not ground to levy Service tax on Collection of Security Charges for providing Police Guards: CESTAT [Read Order]
CESTAT rules charging of fee by Police not ground to levy Service tax on collection of security charges for providing police guards
![Charging of Fee by Police not ground to levy Service tax on Collection of Security Charges for providing Police Guards: CESTAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2024/01/Charging-Fee-Police-levy-Service-tax-Collection-Security-Charges-Guards-CESTAT-TAXSCAN.jpg "Charging of Fee by Police not ground to levy Service tax on Collection of Security Charges for providing Police Guards: CESTAT [Read Order]")
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the charging of fee by Police not ground to levy Service tax on collection of security charges for providing police guards. The order passed by the Commissioner (Appeals) upholding the order passed by the Additional Commissioner to the extent it confirms the demand of service tax and orders...
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the charging of fee by Police not ground to levy Service tax on collection of security charges for providing police guards.
The order passed by the Commissioner (Appeals) upholding the order passed by the Additional Commissioner to the extent it confirms the demand of service tax and orders for recovery of interest under section 75 of the Finance Act, 1994 and also remands the matter for examining the penalties imposed under sections 76, 77 and 78 of the Finance Act have been assailed in this appeal that has been filed by the Superintendent of Police, Satna in the State of Madhya Pradesh.
The issue that arises for consideration in the appeal is as to whether collection of security charges for providing police guards to various banks for their security would entail levy of service tax under the category of “security agency services” defined under section 65 (94) of the Finance Act and made taxable under section 65 (105) w of the Finance Act.
In Superintendent of Police, Swai Madhopur vs Commissioner of Central Excise, Jaipur, it was observed that “In view of above, we find that all conditions required in the above circular of CBEC are fulfilled. Therefore, no service tax chargeable under Security Agency Services upon the Appellant. The CBEC circular being binding on the department, a demand to the contrary is not sustainable and needs to be set aside.”
A Two-Member Bench comprising Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “It has been held in the aforesaid decision that merely because the Police may charge a fee it would not become “a person engaged in the business of providing security” and, therefore, no service tax can be levied.”
To Read the full text of the Order CLICK HERE
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