CENTRAL INDUSTRIAL SECURITY FORCE Vs. C.S.T.

JUDGEMENT

(1.) SERVICE Tax of Rs. 5,99,79,100/ - with interest has been demanded from the appellant (CISF). Penalty equal to the Service Tax amount has also been imposed on the appellant under Section 78 of the Finance Act, 1994. Show cause notice was issued on 13 -6 -2012 and the period involved is from 1 -4 -2009 to 30 -9 -2011. Learned counsel submits that as per the terms and conditions of the appellant (CISF), the deployment of force will be completely at the cost of the Company which among other things includes salary for the personnel deployed, their TA/DA, pension, leave salary contribution etc. at the rates fixed by the Government from time -to -time. He submits that the demand can be classified under three Headings (i) Reimbursable expenses (ii) Excess pension amount deducted (iii) Tax on House Rent Allowance (HRA).

(2.) THE first demand is approximately Rs. 5.18 crores. This demand is based on the estimates prepared by M/s. RINL (service recipient) towards various expenditure including salary for the personnel of CISF (Appellant) for ensuring that security services are available. This demand also included medical expenditure incurred by M/s. RINL on CISF. The Department has contended that it is reimbursable expenditure. Prima facie, we find that this cannot be considered as reimbursable expenditure since in the first place this expenditure are not incurred by CISF at all. Therefore, prima facie, appellant has made out a case in respect of this amount.

(3.) THE third demand is approximately Rs. 17 lakhs. M/s. RINL provides accommodation to CISF employees and in this case, no HRA is paid to CISF. Since there is no question of receipt of HRA by the appellant, there is no question of payment of Service Tax on the notional value of the HRA which is presumed to be received by the appellant for reimbursement to CISF. Therefore, in this case also, we do not find that it can be covered under reimbursable expenditure or under the category of payment for the service rendered. In view of the above discussion, we find that prima facie, the appellant has made out a case. Accordingly, there shall be waiver of pre -deposit and stay against recovery of the adjudged dues during pendency of the appeal.