Case Law Details
Mumbai Police Vs. Commissioner of Service Tax (CESTAT Mumbai)
Brief facts of the case are that the Appellants are providing security to banks, individuals, security for cricket matches, IPL, World Cup, Mumbai Port Trust, Mazagaon Dock, Tata Power, FCI and for other functions. They were issued show cause notice demanding service 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.
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 – 1 1-TMI-346 and thus not liable for tax.
On appeal CESTAT held that “police department, which is an agency of the State Govt., cannot be considered to be a “person” engaged in the business of running security services. Consequently, the activity undertaken by the police is not covered by the definition of Security Agency under Section 64(94) of the Act. We also find that in terms of C.E. & C. ‘s circular on this subject, the fees collected by the police department is in the nature of fee prescribed for performing statutory function, which has been deposited into the Govt. treasury. In the light of the C.B.E. & C. ‘s circular also, there can be no levy of service tax on such activities carried out by the police department.”
FULL TEXT OF THE CESTAT ORDER IS AS FOLLOWS:-
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