Burden Lies on Assessee to Prove that his Case Falls under Exemption Notification: CESTAT confirms Service Tax Demand on Restaurant Service [Read Order]

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), confirmed service tax demand on restaurant service and observed that burden lies on the assessee to prove that his case falls under the Exemption Notification.

A show cause notice was issued to the appellant, Gurukripa Yuvraj Veg. & Appellant Non-veg. Restaurant, which was adjudicated by the Assistant Commissioner who confirmed the demand and the same was affirmed by the impugned order. The appellant has preferred the instant appeal before the Tribunal.

The issue involved herein is whether the services provided by the appellant would fall under the category of Restaurant-cum- Bar Service as defined under section 65(105)(zzzzv) of the Act and the appellant is liable to pay the service tax in respect thereof.

The revenue officials have fully investigated the case with the State authorities both on facts as well as on the legal aspect to ascertain the status of providing air conditioning facility in Restaurant-cum-Bar. As per State Rules/Conditions for granting the Bar Restaurant licence, it was mandatory to have air conditioning facility for obtaining and also for renewal of Restaurant-cum-Bar licence and the licence granted to the appellant was renewed regularly during the period from 2011-12, 2012-13 and 2013-2014.

The licence is currently valid which means that the appellant is still running the Restaurant-cum-Bar and as per the Restaurant Bar Licence policy and law of State Excise Department the appellant needs to comply with the conditions linked with the grant of licence as well as for the renewal of the licence and one of which is that air conditioning facility is provided therein.

A Two-Member Bench comprising Binu Tamta, Judicial Member and PV Subba Rao, Technical Member observed that “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.”

“We, therefore do not find any infirmity in the impugned order which is hereby affirmed and the demand of service tax for the period from 01.05.2011 to 31.03.2015 along with penalty under Section 77(1)(a), 77(2) and 78 of the Finance Act, 1944 is upheld” the Bench noted.

To Read the full text of the Order CLICK HERE

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