1) The agency does have the service tax registration number and is raising the bills / invoice mentioning the service tax
2) Since it is case where the agency is asking payment on vouchure basis, please ensure he actually paid it by asking the deposit challan where he will mention the necessary particulars such as his service tax registration number, category, the work etc. or the invoice against which he is depositing the service tax. After ensuring that he actually paid, it can be reimbursed.
3) In google search, please type "Service Tax Abatement" and search the exemptions available for your work. If the work is exempted, but he is claiming, then you should be careful.