IMPORTANT POINT
A charitable society providing security services is deemed a commercial concern under the Finance Act, 1994, thus liable for service tax despite its non-profit status.

JUDGMENT :

A.K. JAYASANKARAN NAMBIAR, J.

1. As all these appeals involve a common issue and are preferred against a common order dated 12.12.2017 of the Customs, Excise and Service Tax Appellate Tribunal, Bangalore, they are taken up together for consideration and disposed by this common judgment.

2. The brief facts necessary for disposal of these appeals are as follows:

The appellant in all these appeals is the Kerala State Ex-services League, which is a Charitable Society registered under the Travancore Cochin Society Registration Act, 1955 and is affiliated to the Indian Ex-Service League, New Delhi. It has its registered office at Trivandrum and the League has District Committees in all the Districts in the State of Kerala. The primary object of the League is stated to be to look after the socio-economic and welfare matters of ex-servicemen and their families. Annexure A1 Bye-law of the League is also produced to show that the Society is incorporated for the purposes of coordinating the welfare measures for the benefit of the ex-servicemen and their family members.

3. The issue in these appeals arises from the notices issued to the appellant in 1998 asking it to register itself as a service provider under the head of “security agency service” as defined under Section 65(40) of the Finance Act, 1994 prior to 2006 and under Section 65(94) of the said Act after the 2006 amendment.

4. C.E. Appeal No. 16 of 2018 arises from the proceedings that commenced with the challenge to the notice requiring the appellant to take out registration as a service provider under the head of “security agency service.” C.E. Appeal Nos. 20 and 28 of 2018 arise from proceedings initiated by the Department for recovery of service tax dues together with penalty and interest for various periods between 1998 and 2006 from the appellant. It would appear that after an initial round of litigation which culminated in an order of the Appellate Tribunal remanding the matter to the original authority for consideration as to whether or not the appellant would satisfy the definition of “a commercial concern engaged in the business of rendering services relating to the security of any property, whether movable or immovable, or of any person, in any manner” the original authority once again found that the activities of the appellant would attract the definition of “security agency service” for the purposes of payment of service tax under the Finance Act, 1994, as amended.

5. Aggrieved by the order of the original authority, the appellant preferred appeals before the First Appellate Authority which confirmed the demand of service tax and penalty on the appellant. In the further appeals preferred by the appellant before the Appellate Tribunal, the Appellate Tribunal also found that the services provided by the appellant would attract the definition of “taxable service” under the head of “security agency service” and therefore dismissed the appeals preferred by the appellant and confirmed the demand of service tax and penalty on the appellant. For the sake of completion of the facts, we might note at this juncture that the common order of the Appellate Tribunal that is impugned in these appeals disposed 12 appeals and the appellant has chosen to opt for the Amnesty Scheme in respect of 9 of those 12 appeals. The above 3 appeals with which we are concerned now, are those appeals in respect of which the appellant has not chosen to opt for the Amnesty Scheme.

6. Appearing on behalf of the appellant, the argument of Dr. K.P. Pradeep, the learned counsel, is essentially that the services rendered by the appellant cannot attract the definition of “taxable service” as applicable under the head of “security agency service.” He would, in particular, point to Annexure A6 Circular dated 10.06.1985 issued by the Directorate of Sainik Welfare, Trivandrum, to point out that the appellant came into being for the purpose of looking after the socio-economic and welfare matters of Ex-service