CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH, COURT NO. 3 SERVICE TAX APPEAL NO. 51067 OF 2021 [Arising out of Order-in-Apeal No.28(CRM)ST/JDR/2021 dated 02.02.2021 passed by the Commissioner (Appeals), Central Excise and Central Goods & Service Tax, Jodhpur]

M/s. Rajasthan Housing Board, Division-I Appellant Salumber Chauhara, Sectro-13, Hiran Magri, Udaipur-313002 (Rajasthan)

Vs.

Commissioner (Appeals), Office of the Commissioner (Appeals), Respondent Central Excise & Central Goods and Service Tax, Jodhpur G-105, New Industrial Area, Opp. Diesel shed, Basni, Jodhpur (Raj.) Appearance:

Present for the Appellant : Shri M.B. Maheshwari, Chartered Accountant Present for the Respondent: Shri S.K.Meena, Authorised Representative CORAM:

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

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

Date of Hearing/Decision: 26.02.2026 Final Order No.50382/2026 HEMAMBIKA R. PRIYA The present appeal has been filed by M/s. Rajasthan Housing Board, Division-I¹ against the Order-in-Appeal No.28(CRM)ST/JDR/ 2021 dated 02.02.2021 passed by the Commissioner (Appeals), Central Excise and Central Goods & Service Tax, Jodhpur, wherein the

1. the Appellant demand of service tax amounting to Rs.69,20,129/- was confirmed alongwith interest and penalty imposed under Section 78 of the Finance Act, 1994.

2. The brief facts are that the Appellant having service tax registration was engaged in rendering "Works Contract Services", Construction Services, Renting of Immoveable property service and legal consultancy service. During the course of audit of the Appellant, the Department observed that the appellant had collected an amount of Rs.4,91,40,973/- as lease money from their customers during the period from October, 2013 to June,2017. The ownership rested with the Appellant and the property had been given on lease. The Department opined that the amount collected as lease money against the plots for a 99 years lease, was a consideration chargeable to service tax under „Renting of Immoveable Property‟ service in terms of Section 66E(a) of the Finance Act, 1994. Thereafter, a Show Cause Notice dated 18.07.2019 was issued to the Appellant for demand of service tax of Rs.69,20,129/- along with applicable interest and alleging penalty under Section 78 of the Finance Act, 1994. The said Show Cause Notice was adjudicated by the Additional Commissioner of CGST Commissionerate, Udaipur vide Order-in-Original No.06/ST/UDR/2020-21/ADC dated 29.07.2020, wherein adjudicating authority confirmed the demand of Service tax of Rs.69,20,129/- along with applicable interest; imposed penalty of Rs.69,20,129/- under Section 78 of the Finance Act, 1994. Aggrieved by the impugned Order-in-Original, the Appellant filed appeal before Commissioner (Appeals), Jodhpur. The appellate Authority vide Order-in-Appeal No.

28(CRM)ST/JDR/2021 dated 02.02.2021, upheld the Order-in-Original and rejected the Appeal filed by the appellant. Aggrieved by the said Order-in-Appeal, the Appellant has filed the present appeal before this Tribunal.

3. Learned Counsel submitted that the Commissioner (Appeals) had grossly erred in interpreting Section 65B (41) of the Finance Act, 1994. "Renting" meant allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and included letting, leasing, licensing or other similar arrangements in respect of immovable property. Learned counsel submitted that the renting of residential dwelling for use as residence was under the negative list as per section 66D(m) of the Finance Act, 1994. The amount received by the Appellant on leasing of the residential units were squarely covered under the said entry and no service tax was leviable on the amount received as residential lease. The Residential lease money' was collected by the appellant on behalf of the Governm