2025 (2) TMI 519 - AT - Service Tax

Levy of service tax - restaurant service without air conditioning facility - appellant argued that the air conditioning was removed as it lacked the power capacity to run AC - HELD THAT - In his statement recorded under Section 14 of the Central Excise Act the appellant stated that on 8.7.2010 when he obtained Bar licence he had air conditioning facility in his Restaurant-cum-Bar. However this facility of air conditioner was removed and instead air coolers was provided by the end of year 2010 till 31.12. 2012. Meanwhile on enquiry with the State Excise Department the copy of the application along with the declaration as submitted by the appellant for obtaining the liquor licence was produced which clearly mentioned that the restaurant is air conditioned. It also appears that this matter was verified by the Central Excise Officer as to whether the appellant had submitted any further communication for removing the air conditioning facility and instead providing air cooler facility at the restaurant. However the State Excise Officer vide letter dated 09.09.2013 informed that no such communication had been made by the appellant. It is clear that the statement made by the appellant on 28.12.2012 was a mere cover to avoid any service tax liability and there is no substantive proof in support thereof. On the contrary it is on record that in the initial application made by the appellant on 23.6.2010 for availing the liquor licence the restaurant had air conditioning facility. There is nothing to rebut this documentary evidence and therefore the case of the appellant is not acceptable. In similar facts and circumstances in the case of Gurukripa Yuvraj Veg. Non Veg. Restaurant vs. Commissioner and Additional Director General Jaipur 2023 (8) TMI 1049 - CESTAT NEW DELHI. wherein the proprietor was the same Sh. Charan Pal Singh has decided the matter and it was held that We therefore do not agree with the aforesaid order of the Commissioner (Appeals). Unless and until the appellant is able to produce any cogent and substantive evidence in support of his statement that he does not have the AC facility in the restaurant he is not eligible to claim the benefit of the exemption notification. The burden lies on the appellant to prove his case that he falls under the exemption Notification as there is no AC facility in his restaurant which he has failed to do. Conclusion - The statement made by the appellant on 28.12.2012 was a mere cover to avoid any service tax liability and there is no substantive proof in support thereof. There is nothing to rebut this documentary evidence and therefore the case of the appellant is not acceptable. There are no infirmity in the impugned order. Consequently the appeal is dismissed.

Summary

The present appeal before the Appellate Tribunal concerns M/s Gurukripa Shahenshah Veg and Non-Veg Restaurant challenging the Commissioner (Appeals) decision confirming a service tax demand, interest, and penalties imposed under the Finance Act, 1944. The appellant, a sole proprietorship firm engaged in Restaurant-cum-Bar services, faced allegations that its restaurant service was subject to service tax due to the presence of air conditioning facilities. The appellant argued that the air conditioning was removed, and it lacked the power capacity to run AC. The appellant contended that there was no intention to evade tax and invoked legal precedents to support its position.The Department, represented by the Authorized Representative, maintained that the presence of AC was a mandatory requirement for obtaining and renewing the Bar License. The Department highlighted the appellant's declaration of having AC facilities and the failure to obtain Service Tax Registration during the relevant period. The Department argued for the dismissal of the appeal.The Tribunal considered the arguments and evidence presented. The Tribunal noted the definition of Restaurant-cum-Bar Service under the Finance Act, 1994, and the subsequent amendments. It reviewed the appellant's statements, the State Excise Department's verification, and the documentary evidence regarding the presence of AC facilities. The Tribunal referenced a previous case involving the same proprietor, where similar issues were addressed, and upheld the findings against the appellant. The Tribunal concluded that the extended period of limitation applied due to the appellant's actions to evade tax liability. Penalties under the Finance Act, 1994 were confirmed, and the appeal was dismissed.In summary, the Tribunal upheld the Department's decision based on the mandatory requirement of AC facilities for the Bar License, the appellant's inconsistent statements, and the failure to provide substantive evidence to support its claims. The Tribunal found the appellant's conduct demonstrated an intent to evade tax, leading to the confirmation of the service tax demand and penalties. The decision was in line with previous rulings and legal principles, resulting in the dismissal of the appeal.