2008 (6) TMI 68 - AT - Service Tax

Applicants were providing the services of security officer security supervisor gun man security guards etc. - Applicant had not questioned the leviability of service tax on the security agency service - applicant s only plea is that they are liable to pay on the commission received from the customers not on the gross amount - As the applicant is received gross amount for providing the security therefore prima facie it is not a fit case for waiver of total amount of service tax

Summary

Issues:
1. Whether the applicant is liable to pay service tax on the gross amount or only on the commission received from customers.

Analysis:
The case involved an application for waiver of pre-deposit of service tax amounting to Rs. 35,40,079/- and Rs. 16,21,670/-, along with penalties, as the demand was confirmed on the basis that the applicant provided security services. The applicant contended that they only supplied manpower and not security services, therefore challenging the sustainability of the demand. Additionally, the applicant argued that they should only be liable to pay tax on the commission received from customers, not on the gross amount.

The Tribunal noted that the applicant did not dispute the leviability of service tax on security agency services before the lower authorities. The main issue was whether the tax should be paid on the gross amount or only on the commission. The Tribunal examined the invoices provided by the applicant, which showed services such as security officers, supervisors, guards, etc., being supplied for a gross amount. Consequently, the Tribunal found that it was not a suitable case for a complete waiver of the service tax amount. The applicant was directed to deposit Rs. 12 lakhs for the appeal hearing, and upon this deposit, the remaining service tax amount and penalties were waived. The compliance reporting was scheduled for a specified date.

In conclusion, the Tribunal's decision emphasized that the applicant, by receiving a gross amount for providing security services, was required to make a deposit for the appeal hearing. The waiver of the remaining service tax and penalties was contingent upon this initial deposit, reflecting the Tribunal's assessment of the case's merits based on the nature of services provided and the invoicing details presented by the applicant.