2026-VIL-1512-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax on liability on security services provided by statutory welfare board - Taxability under security agency definition - Appellant is a statutory board constituted under statute and engaged in welfare activities for ex-servicemen by providing security guards to banks on no profit no loss basis - Department sought to levy service tax on amounts received against providing security services classifying them under security agency service - Whether services rendered by statutory welfare board providing security guards for welfare purposes constitute taxable security agency services - HELD - A statutory body performing statutory functions and not engaged in commercial business cannot be classified as security agency within meaning of Section 65(105)(w) and Section 65(94) of Finance Act 1994 - The definition of security agency specifically requires that entity be a commercial concern engaged in business of providing security personnel. The Appellant-Board provides ex-servicemen as security guards purely for welfare purposes without earning profit and merely routes payments through Board to maintain administrative control. The consideration received constitutes reimbursement of salary disbursed to guards not commercial consideration for security services. Fee collected by public authority while performing statutory functions is not exigible to service tax as per Board Circular 89/7/2006. The activities performed by statutory board do not fall within definition of security agency service - No suppression of facts or willful misstatement has been established. Revenue has not established fraud collusion wilful misstatement suppression of facts or contravention with intent to evade tax which are prerequisites for extended period invocation - The impugned orders are set aside and appeals are allowed
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