2026-VIL-154-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Royalty and Dead Rent for Grant of Mining Rights – Department is engaged in the grant of mining leases for extraction and sale of minerals. The Department issued a show cause notice alleging that the royalty and dead rent collected by the appellant was in the nature of rent for allowing the use of vacant land for mining purposes, and hence, service tax was leviable under 'renting of immovable property' category - Whether the royalty and dead rent for grant of mining rights are liable to service tax under the category of 'renting of immovable property services' falling within the definition of 'support services' – HELD - The issue is no more res integra and has been decided in favour of the appellant in their own case earlier. The activity of lease of land solely for mining purposes is in the nature of exercise of sovereign right and is not a service that entities can carry out by themselves. The service of renting of immovable property would fall within the definition of 'support service' only if such services fit into the middle part of the definition, which is not the case here. The clarification issued by the Board that mining lease for grant of mining rights is not a 'support service' is in accordance with the statute. Considering the change introduced in Section 66D(a) of the Negative List, the Tribunal accepted the submissions of the appellant that when there is no change in law as to the person liable to pay service tax, the revenue cannot collect service tax from the assessee on forward charge basis for the period 01.07.2012 to 31.03.2016 and under reverse charge basis from the lessee on the very same service after 01.04.2016 - The impugned order is set aside and the appeal is allowed
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