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2019 (11) TMI 250 - AT - Service TaxSecurity services - appellant had provided guards to various branches of State Bank of Bikaner and Jaipur(SBBJ) in Sawai Madhopur district and conducted verifications - demand of service tax alongwith interest - CBEC Circular No. 89/07/2006-ST dated 18/12/2006 - if the Police provides guards to banks or other commercial concerns and charges a fee as per the rates determined by the Government whether service tax can be charged under “Security Agency Services” on such fee or otherwise? - HELD THAT:- 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 sovereign or public authority for carrying out any statutory function will not be liable for service tax fees if three conditions are fulfilled. There is no doubt in the entire proceedings that the amount so received was deposited in the Government treasury. Thus, 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. Appeal allowed - decided in favor of appellant.
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