Custom, Excise & Service Tax Tribunal
Jalalabad Associates vs Ludhiana on 13 February, 2026
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Service Tax Appeal No. 60138 of 2023
[Arising out of Order-in-Appeal No. LUD-EXCUS-001-APP-2044-19 dated
01.02.2019 passed by the Commissioner (Appeals), Central Excise, Ludhiana]
M/s Jalalabad Associates ......Appellant
(Co-owners), C/o Bhart Kumar Watts,
Arora Rice Mills, Fazika Road, Jalalabad,
Fazilka, Punjab-152024
VERSUS
Commissioner of Central Excise & ......Respondent
Service Tax, Ludhiana GST Bhawan, F-Block, Rishi Nagar, Ludhiana, Punjab-141001 APPEARANCE:
Shri R.K. Hasija and Shri Shivang Puri, Advocates for the Appellant Shri Ram Niwas, Authorized Representative for the Respondent CORAM: HON'BLE MR. S. S. GARG, MEMBER (JUDICIAL) HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) FINAL ORDER NO. 60158/2026 DATE OF HEARING/ DECISION: 13.02.2026 P. ANJANI KUMAR:
Eleven co-owners of a property, under the name of Jalalabad Associates, have entered into a contract with Punjab State Warehousing Corporation effective from 01.05.2009; as per the Agreement, PSWC was paying rent to all the eleven co-owners in the proportion of the share of their property after deducting applicable TDS; Revenue was of the opinion that these eleven co-owners have
2 ST/60428/2017 formed an Association of Persons and have rendered the services of "Renting of Immovable Property" falling under Section 65 (105) (zzzz) of Finance Act, 1994; show cause notice dated 22.04.2016, covering the period 01.04.2014 to 31.03.2015 ,demanding service tax of Rs.4,20,240/- was issued; the show cause notice were adjudicated vide order dated 16.02.2018 by Additional Commissioner, Central Excise, Ludhiana. Aggrieved by the said order, the appellants filed appeal before the Commissioner (Appeals). The appeal was dismissed vide impugned order dated 01.02.2019. Hence, this appeal.
2. Shri R.K. Hasija, learned counsel for the appellants, submits that the value of the taxable service qua each of the co-owners is less than Rs. 10 Lakhs and therefore, exemption under small-scale notification is admissible to the appellants. Learned counsel further submits that the issue is squarely covered on merits in favour of the appellants; as per Notification No.06/2005-ST dated 01.03.2005 (as amended from time to time), service tax was exempted on the taxable services for the value of Rs. 10 Lakhs in a financial year. He places reliance on the following cases:
Deoram Vishrambhai Patel - 2015 (40) STR 1146 (Tri. Mumbai) Anil Saini & others - Final Order No.61723- 61729/2016 dated 05.12.2016 Ramesh Kumar Chaudhary & Others - 2024 (12) TMI 1025- CESTAT Chandigarh Bijoy Kumar Almal - (1995) 125 CTR (SC) 418 CIT vs. Manager, SBI - [2009] 226 CTR (Raj.) 310 CIT v. Senior Manager, SBI -[2012] 20 taxmann.com 40 (All.)
3 ST/60428/2017 CIT v. Manager, State Bank of India- [2009] 226 CTR 310 (RaJ.) Amalendu Sahoo V ITO - (2003) 264 ITR 16 (Cal);
Orient Bank of Commerce V-TDS / TRO (2006) 99 TTJ 1235 (Chd).
4. Shri Ram Niwas, learned Authorized Representative for the Revenue reiterates the findings of the impugned order.
5. Heard both sides and perused the records of the case. We find that the issue is no longer res integra having been decided by this Bench vide Final Order No. 61723-61729/2016 dated 05.12.2016 wherein it was held that when the property is co-owned by two or three persons and their respective share is definite and can be ascertained, the same shall not be assessed as an Association of Persons (AoP) and that each of them would be eligible for the exemption contained as per Notification No.06/2005-ST dated 01.03.2005 (as amended from time to time). In view of the same, the impugned order cannot be sustained and is liable to be set aside.
6. Accordingly, we set aside the impugned order and allow the appeal.
(order pronounced in the open court) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) PK