The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the service tax on renting of immovable property.
The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) observed that the appellant had rented its property to two commercial entities is not in dispute. Renting of immovable property service was a taxable service during the relevant period is also not in dispute. The renting of immovable property cannot be considered as a service and, therefore, no service tax could be levied by the Central Government.
The appellant was registered with the service tax department. During the course of scrutiny of its ST-3 returns, it was found that the appellant was not paying service tax on the gross amount of income received as “renting on immovable property”.
On perusal of the amount wise details of service tax paid from October 2019 to September 2011, it was felt that the appellant had not paid service tax on the gross amount of income which it had received from its clients. A show cause notice dated 21.09.2011 was issued to the appellant proposing to recover the service tax under section 73 (1) of the Finance Act with interest and penalty.
The appellant did not submit any written reply in defence nor did it seek personal hearing. However, personal hearings were held on 27.09.2012, 27.12.2012 and 24.01.2013.
Nobody appeared for the personal hearings. The Assistant Commissioner passed the order originally dated 28.02.2013 confirming the demand of service tax as proposed under section 73(1).
The Assistant Commissioner also confirmed the demand of interest under section 75 of the Finance Act and further imposed an equal amount of penalty under section 78.
The tribunal upheld the order and appeal and dismissed the appeal.
Case Details
Case Title: Satnam Kaur Versus Commissioner Of Central Excise And Service Tax-Meerut-II
Case No.: Service Tax Appeal No. 53769 Of 2014
Date: 10/03/2025
Counsel For Petitioner: None
Counsel For Respondent: Manoj Kumar
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