CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH, COURT NO. 3 SERVICE TAX APPEAL NO. 52715 OF 2019 [Arising out of Order-in-Original No. JOD-EXCUS-000-COM-0005-19- 20 dated 27.06.2019 passed by the Commissioner, Central Goods &

Services Tax & Central Excise, Jodhpur]

The Director, …Appellant Directorate of Petroleum, Khanij Bhawan, Tilak Marg, C-Scheme, Jaipur-302 005.

Versus Commissioner of Central GST, …Respondent Commissionerate, G-105, Road No. 5, New Industrial Area, Basni, Opp. Diesel Loco Shed, Behind AIIMS, Jodhpur (Rajasthan)-342 003.

Appearance:

Shri Ritul Patwa, Advocate for the appellant.

Shri Ajay Jain, Special Counsel with Ms. Jaya Kumari, Authorised Representative CORAM:

HON'BLE MS. BINU TAMTA, MEMBER (JUDICIAL)

HON’BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL)

Date of Hearing: 26.05.2025 Date of Decision:25.06.2025 FINAL ORDER NO.50932 /2025 BINU TAMTA:

1. By the impugned order¹, the learned Commissioner has imposed service tax, interest and penalty on royalty and dead rent collected by the appellant against grant of Mining Lease for

Order -in-Original No.JOD-EXCUS-000-COM-0005-19-20 dated 27.06.2019

Exploration of Mineral Oils in Rajasthan for the period from 01.04.2013 to 31.03.2016 under the category of “Renting of Immovable Property Service”, under Section 65B (41), which is a declared service under Section 66E of the Finance Act,1994, Act 1994. The findings of the Commissioner is that by virtue of Section 66D (a) read with Section 65B(49) of the Act, “Renting of Immovable Property” provided by Government to a business entity is treated as a “Support Service” which is not covered under “Negative List of Service” under Section 66D (a) and is subject to levy of service tax under the forward charge mechanism.

2. The appellant is a Government of Rajasthan Department, responsible for grant of Petroleum Exploration Licenses and Petroleum Mining Licenses for Oil, Gas and Coal Bed Methane and collection of revenue from Hydrocarbon sector related to royalty and other dues. The present appeal has been filed by the appellant before this Tribunal against the confirmation of the show cause notice dated

16.10.2018 for service tax liability of Rs.1,657.71 Crores.

3. The issues raised relates to classification of service of grant of mining rights by Government and taxability of Government service as per Section 66D (a) of the Negative List.

4. Heard both sides and perused the records of the case.

5. The learned Counsel for the appellant referring to the various provisions of the Finance Act has pointed out that the Department has taken self-contradictory view as for the period from 01.04.2012 to 31.03.2016, they are claiming grant of mining as “Renting of Immovable Property” and demanding service tax on forward charge basis, whereas for the subsequent period after 01.04.2016, for the same service, the Department has raised the demand of service tax on the lessees under Reverse Charge Mechanism and not under forward charge though “Renting of Immovable Property” Service under Rule 2(1)(d)E and Notification No.30/2012 is uniformly under the forward charge mechanism „before‟ and „after‟ 1.04.2016. The learned counsel has very vehemently supported the arguments relying on the decision of the Principal Bench of this Tribunal in the case of The Mining Engineer versus Commissioner of GST and Central Excise, Final Order No. 52006–52027 of 2021 dated 25.11.2021,, whereby the issue has been decided in favour of the appellant.

6. The learned Special Counsel for the Revenue has relied on the findings of the Commissioner and also referred to the decision of the Rajasthan High Court in Udaipur Chambers of Commerce and Industry Vs. Union of India, 2018 (8) GSTL 170 (Raj.) .

7. We find that the issue considered by the Principal Bench in the batch of 17 appeals including the five appeals filed by the Revenue was whether the assessee is liable to pay service tax under the category of “Renting of Immovable Property Services”, falling