Safeguarding the building of the bank along with the fixtures, fittings and equipment, cash, other securities etc. - Not security services in relation to safe deposit lockers or security of safe vaults: CESTAT
NOTIFICATION 56/98-ST dated 07/10/98 w.e.f 16/10/98 read -
"In exercise of the powers conferred by section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service provided by a security agency from the service tax leviable on the gross amount charged from a client in relation to the services of providing safe deposit lockers or security or safe vaults, for security of movable property."
In the present case, the respondent provided security services to the banks. The respondents are responsible for safeguarding the building of the banks along with fixtures, fittings, equipment, cash etc. as is apparent from the agreement.
They claimed the benefit of Notfn. 56/98-ST and which was allowed by the Commissioner(A) and consequently the demand of Rs.3,57,362/- and penalty imposed were set aside.
Revenue is in appeal against this order before the CESTAT and submits that the lower appellate authority has wrongly interpreted the notification and allowed the benefit.
The Bench observed -
"6. We have gone through the agreement produced by the respondent. As per the agreement, the respondents are responsible for safeguarding the building of the bank along with the fixtures, fittings and equipments, cash, other securities etc. Therefore, it cannot be said that the respondents are providing security services in relation to safe deposit lockers or security of safe vaults. In view of this the benefit of notification is not available to the respondents.
6.1 In respect of the imposition of penalties we find that section 80 of the Finance Act provides that "Notwithstanding anything contained in the provisions of Section 76, section 77 or section 78 no penalty shall be imposable on the assessee for any failure referred to in the said provisions if the assessee proves that there was a reasonable cause for the said failure". In the present case the respondents are registered with the Revenue authorities as service provider and paying appropriate service tax. The issue involved in the appeal is in respect of interpretation of Notification. In view of the provisions of Section 80 of the Finance Act, we waive the imposition of the penalties."
The appeal was disposed of accordingly.
And you thought a set includes a subset!