2026-VIL-1902-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Renting of immovable property for use as residence - Section 66D(m) of Finance Act, 1994 - Based on information from the Income Tax Department, the Respondent demanded Service Tax on rent received by the Appellant from renting of immovable property for the post negative list period. The Appellant contended that the property was rented out for use as residence, namely a hostel - Whether the rent received from renting of immovable property is taxable - HELD - The phrase residential dwelling is not defined in the Finance Act, 1994. It means any building, structure or part thereof, other than offices or factories, used or intended to be used as home or residence, whether permanently or temporarily. A hostel qualifies as a residential dwelling as it is a house of residence for students for a comparatively longer period than a stay in a hotel or lodge. Clause (m) of Section 66D specifically excludes services by way of renting of residential dwelling for use as residence from taxable service under Section 65B(44). The issue was already decided in the Appellant's own case for the earlier period on the same reasoning - The rent is not taxable and the demand along with interest and penalties is set aside - Credit of tax deposited under challans - Cenvat Credit Rules, 2011 - The Appellant claimed credit of the amount deposited through two challans against the demand. The Respondent denied it as the Appellant had not filed returns for the period - Whether the Appellant is eligible for the credit of the amount deposited - HELD - Cenvat credit can be availed only when the output service is taxable and only on a document as required under Rule 9(2). The assessee must maintain records under Rule 9(6). The Appellant led no evidence to establish that the conditions of the Cenvat Credit Rules are satisfied - The Appellant is not eligible for the credit and the appeal is allowed in part.
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