TMI Blog2016 (12) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... argeable to Service Tax as a regular service provider. It is apparent that the wages and allowances are collected by the Board as an Agency for payment to the concerned persons/authorities. Therefore, the wages and allowances are excludible from the value of service tax. Thus, the taxable value for the purpose of levy needs to exclude these charges. The demand is modified to that extent. As regards penalty imposed u/s 76, 77 and 78 of the Finance Act, 1994, we find that the board has been created for welfare of the working class. One of the purposes of the board is to ensure that working people are treated well and not exploited. In these circumstances, invoking Section 80 of the Finance Act, 1994, we set aside penalties under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gued that the appellants are providing statutory functions and therefore cannot be considered providers of services. Learned Counsel argued that as per provisions of Sections 6 8 of the Maharashtra Private Security Guards (Regulation of Employment Welfare) Act, 1981. The appellants are statutory body established by the Government of Maharashtra for regulating the employees of Security Guards employed in the State of Maharashtra. The function of the Board is to ensure better provisions for the terms and conditions of the employment and welfare of the security guards. Learned Counsel argued that these functions are statutory in nature. The learned Counsel argued that the same cannot be treated as business to qualify under the definition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urity Guards (Regulation of Employment Welfare) Act, 1981. Under clause 40 of the Maharashtra Private Security Guards (Regulation of Employment Welfare) Scheme, 2002, following has been prescribed:- 40. Cost of operating the Scheme and provision for amenities and benefits to the registered Security Guards of the Board.- (1) The cost of operating this Scheme and for providing different benefits, facilities and amenities to the registered Security Guards of the board as provided in the Act and under this Scheme, shall be defrayed by payment made by the registered principal employers to the Board. Every registered principal employer shall pay to the Board such amount by way of levy in respect of registered Security Guards of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd other information as may reasonably be required in connection with the operation and financing of this Scheme. (7) If a registered principal employer fails to make the payment due from him under sub-clause (1) within the time specified by the Board the Secretary shall serve a notice on the principal employer to the effect that unless he pays his dues within three days from the date of receipt of the notice, the supply of registered Security Guards of the Board to him shall be suspended. On the expiry of the notice period the Secretary shall suspend the supply of registered Security Guards of the Board to a defaulting principal employer until he pays his dues. 4.1 Further, under section 6 of the Maharashtra Private Security Gua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members of the Board shall be such as may be prescribed. (8) There shall be paid to every member (not being a member representing the State Government) from the fund of the Board, travelling and daily allowances for attending meetings, of the Board at such rates as may be prescribed. (9) The meetings of the Board and procedure to be followed for the purpose and all matters supplementary or ancillary thereto shall, subject to the approval of the State Government, be regulated by the Board. It can be seen that no Director is paid by the Government of Maharashtra, the levy is collected and is determined by the Board in terms of clause 40. All the expenses and salaries of the said Board are not charged to the Consolidated Fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oard. From the above clause, it is apparent that the wages and allowances are collected by the Board as an Agency for payment to the concerned persons/authorities. Therefore, the wages and allowances are excludible from the value of service tax. Thus, the taxable value for the purpose of levy needs to exclude these charges. The demand is modified to that extent. 4.2 Penalties have been imposed under Sections 76, 77 and 78 of the Finance Act, 1994. We find that the board has been created for welfare of the working class. One of the purposes of the board is to ensure that working people are treated well and not exploited. In these circumstances, invoking Section 80 of the Finance Act, 1994, we set aside penalties under Sections 76 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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