ANJU MAKHIJA vs COMMISSIONER OF CENTRAL EXCISE & CGST-JODHPUR

Court
Customs, Excise and Service Tax Appellate Tribunal

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH, COURT NO.IV

SERVICE TAX APPEAL NO. 55428 OF 2023

[Arising out of Order-in-Appeal No. 165(AK)ST/JDR/2023 dated 02.06.2023 passed
by the Commissioner (Appeals) of Central Excise and Central Goods and Service Tax,
Jodhpur)

ANJU MAKHIJA Appellant
1-C-9, Sheela Choudhary Road,
Talwandi, Kota-324005


Vs.



COMMISSIONER OF CENTRAL EXCISE &
CGST, JODHPUR
G-105, New Industrial Basni, Jodhpur
342003 (Rajasthan)

Respondent



Appearance:

Present for the Appellant: Shri B. L. Bhojwani, Chartered Accountant

Present for the Respondent: Shri Mayank Gupta, Authorized Representative

CORAM:
HON'BLE MR. AJAY SHARMA, MEMBER (JUDICIAL)
HON’BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL)

Final Order No. 51664/2026

Date of Hearing: 16.10.2026

Date of Decision:04.11.2026


HEMAMBIKA R. PRIYA
1
Smt. Anju Makhija has filed the present appeal against the
Order-in-Appeal No. 165(AK)ST/JDR/2023 dated 02.06.2023 wherein
the Commissioner (Appeals) uphold the order-in-original.

1 The appellant

2



SERVICE TAX APPEAL NO. 55428 OF 2023
2. The brief facts of the case are that based on the information
received from Income tax Department, the appellant engaged in
providing taxable services, appeared to be covered under the definition
of "Service" as defined under Section under 65B(44) of Finance Act,
1994. The services provided by the appellant was not exempted under
the Mega Exemption Notification No. 25/2012-ST dated 20.06.2012.
Hence, the Department opined that the appellant had not paid Service
Tax amounting to Rs.4,65,750/- (Including Cess) during the period
01.04.2016 to 30.06.2017 and had contravenied the provisions of
Section 68, 69 & 70 of the Finance Act, 1994 read with Rule 4, 6 & 7 of
Service Tax Rules, 1994 for the period April, 2016 to June, 2017.
Thereafter, the Department sought balance sheet, Income &
expenditure, Form 26AS, ST-3 returns, copy of work orders and
invoice wise details from the appellant. However, the appellant did not
provide the requisite information. Consequently, show cause notice
dated 16.04.2019 was issued, demanding service tax of Rs. 4,65,750/
along with applicable interest and penalties. The Order-in-Original
dated 10.03.2022 confirmed the demand of service tax of Rs. 3,47,625
and dropped the demand of Rs. 1,18,125/-. The said order was
upheld by the Commissioner (Appeals), Jodhpur vide Order in Appeal
dated 02.06.2023. Aggrieved by the said Order-in-Appeal, the
Appellant has filed the present appeal before the Tribunal.
3. Learned Chartered Accountant for the appellant submitted that
the Commissioner (Appeals), on facts and in law. He contended that
in upholding the entire amount of rent received from renting of
immovable property as taxable including the rent calculated received
from residential dwelling, which was exempt from payment of service

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SERVICE TAX APPEAL NO. 55428 OF 2023
tax. Further, the learned Chartered Accountant submitted that the
taxable income of 23,17,500/- and Rs. 16,38,750/- had been
incorrectly worked out by the Superintendent, whereas the correct
amounts were Rs. 21,00,000/- and Rs. 16,95,000/- respectively.
Learned Chartered Accountant further submitted that the Show Cause
Notice did not identify any specific taxable service, did not classify the
receipts under any heading of taxable services under the Finance Act,
1994, and did not name any service recipient. The SCN merely
equated the gross ITR figures with 'taxable receipts' and had
proceeded to demand service tax thereon at the applicable rate. The
fundamental legal defect was that an Income Tax return or Form 26AS
was a document generated under the Income Tax Act, 1961 which
reflects gross income for income tax purposes. The taxable event
under the Income Tax Act was entirely distinct from the taxable event
under the Finance Act, 1994. A gross ITR figure cannot be equated
with 'consideration for a taxable service' for service tax purposes.
Before confirming the demand, the department should have
established taxable service, its classification, the service recipient, and
the consideration received. In the absence of these fundational facts,
the entire demand including interest and penalties-was incorrect.
3.2 Learned Chartered Accountant further submitted that the
Superintendent had observed that in order to support the claim of
renting of residential dwelling for use as residence, documentary
evidence should have been produced. Therefore, the entire amount of
entire amount of rent received from renting of immovable property
calculated at Rs. 23,17,500 as taxable during the period 01.04.2016 to
30.06.2017, including the rent calculated at Rs. 16,38,750 received

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SERVICE TAX APPEAL NO. 55428 OF 2023
from residential dwelling for use as residence which is exempt from
payment of service tax. The nature of rental income was verifiable
from the details furnished by the assessee in her Income Tax Returns.
The facts were duly explained to the Superintendent during the course
of personal hearing on 28.01.2022. In support of his submission,
learned Chartered Accountant relied on the following judgments:-
M/s Shri Shyam Lal versus Commissioner of Central
2
Excise & Central Goods and Service Tax, Jaipur
SRK Innovatives School of Information Private
Limited versus Principal Commissioner of Central
3
Tax, GST
Shri Ravindra Kumar Hasankar versus
4
Commissioner of Central Tax
Balraj Roadlines versus Commissioner of Central
5
Excise and CGST
Kirodiwal Associates versus Commissioner of
6
Central Excise & CGST
Shree Ganesh Telecom Private Limited versus
7
Commissioner of Central Excise & CGST

In view of above submissions, learned Chartered Accountant prayed
that the demand created by treating the amount of rent received from
renting of immovable property as taxable may be set-aside.
4. Learned Authorized Representative for the Department
submitted that before issuance of Order-in-Appeal, personal hearings
were granted to appellant but no one had appeared before the
adjudicating authority. Therefore, the adjudicating authority was left
with no other option but to decide the case on the basis of documents

2 2026 (5) TMI 801-CESTAT NEW DELHI
3 2025 (32) CENTAX 52 (T)
4 2025 (4) TMI 247 (T)
5 2026 (4) TMI 1231 (Tribunal)
6 Final Order No. 51678 of 2025 dt. 06.11.2025
7 2025 (7) TMI 151 (T)

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SERVICE TAX APPEAL NO. 55428 OF 2023
available with the department. Learned AR submitted that the
appellant has contended the demand of service tax has been
confirmed on services of renting of immovable property and taxable
amount calculated was incorrect in para 7.1 of impugned order. The
Commissioner (Appeals) was unable to accept the arguments put forth
as they are not supported by any documentary evidence in respect of
residential dwelling such as copy of agreement/contract, which can
establish that they have received amount from renting of residential
dwelling for use of residence. Thus, the contention of appellant is
liable to be rejected. It is further submitted that two challans had been
deposited but the credit was denied. The appellant had not filed ST-3
returns during the concerned period, thus the contention of the
appellant that service tax had been deposited for the demand
confirmed, is not acceptable. Therefore, no intention to evade
payment of service tax.
5. We have heard the learned Chartered Accountant and the
learned AR and perused the records. The issue before us is the
veracity of the demand confirmed in the impugned order.
6. We note that this Tribunal has already decided the primary issue
for the period 2013-14 to 2015-16 in respect of the same appellant
vide the Final Order No. 51465/2026 dated 15.09.2026. The relevant
paras of the said decision is reproduced hereinafter:-
“11. With respect to the income received from renting of
immovable property, it is the stand of the appellant, since
beginning/the stage of reply to Show Cause Notice, that
the property was rented out for being used as residence.
It was specifically brought to the department's notice that
the immovable property is rented by the appellant for
being used as Hostel. We observe that the phrase
'residential dwelling' has not been defined in the Finance
Act 1994. However, Education guide dated 20/06/2012
issued by CBIC in para 4.13.1 explains the meaning of

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SERVICE TAX APPEAL NO. 55428 OF 2023
residential dwelling, by saying that it is any residential
accommodation which does not include hotel, motel, Inn,
guest house, camp side, lodge, houseboat or like places
meant for temporary stay. But Hon'ble Bombay High Court
in the case of Bandu Ravgi N vs Acharya Ratna Desh
Bhushan Shikshan Prasark Mandal, Kolapur reported in
2003 (3) MLJ 472 Mumbai has explained the meaning of
"residential dwelling" holding that the hostel qualifies to
be called as residential dwelling as it is nothing but a
house of residents for the students for a comparatively
longer period as compared to the stay in hostel, motel etc.
Decision of Privy Council in the case AIR 1937 PC 46 was
relied upon wherein it was observed that there is no
reason for assuming that residence contemplates only to
permanent residence and excludes the temporary one. In
common parlance "residential dwelling" means any
building structure or part of the building or structure other
than offices or factories that is used or intended to be
used as home/ residence though may be permanently or
temporarily.

12. The entire period of demand in the present appeal is
the post negative listing era i.e. when Section 66 D was in
existence in the Finance Act. We observe that said clause
(m) of said section 660 specifically mentions that services
by way of renting of residential dwelling for use as
residence are out of the scope of being called as taxable
service defined under Section 666 (44) of Finance Act
1994. This observation is sufficient for us to hold that the
income received by the appellant by way of renting of the
immovable property is also not taxable.”

7. In view of the above, we set-aside the demand confirmed in the
impugned order.
rd
8. We now take up the 3 ground taken by the learned Chartered
Accountant regarding the eligibility of cenvat credit of Rs. 1,48,714/-.
The relevant para of the impugned order is reproduced hereinafter:-
“Further, the appellant submitted that two challan of
Rs.1,48,714/- (Rs.60000/- and Rs.88714/- both dated
11.03.2019) has been deposited but the adjudicating
authority denied the credit. In this regard, I find that the
appellant has not filed ST-3 returns during the period
2016-17 and 2017-18 (up to June, 2017), thus the
contention of the appellant that service tax has been
deposited vide challan dated 11.03.2019 for the demand
confirmed, is not acceptable.”

9. As noted above, cenvat credit can be availed only when the
output service is taxable. Further, input services are tested by the
definition i.e. „integral‟ and “activities relating to business” limits. Such

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SERVICE TAX APPEAL NO. 55428 OF 2023
credit can be availed on a document as required under Rule 9(2) of
Cenvat Credit Rules, 2011. Further, the assessee is required to
maintain records under Rule 9(6) of the Cenvat Credit Rules. In the
instant case, no evidence has been led by the appellant to establish
that all conditions of the Cenvat Credit Rules is satisfied.
Consequently, we find no reason to differ from the findings of the
impugned order on this issue.
10. In view of the above, we pass the following order:-
(i) The demand alongwith interest and penalties are set-aside
(ii) The appellant is not eligible for the cenvat credit of Rs.
1,48,714/-.
11. The impugned order stands modified and the appeal is allowed to
that extent.

(Order pronounced on 04.11.2026 )

(AJAY SHARMA)
MEMBER ( JUDICIAL )



(HEMAMBIKA R. PRIYA)
MEMBER (TECHNICAL)



G.Y.