The Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld invocation of limitation period as the restaurant-cum-bar suppressed the fact of availability of AC facility with the intention of tax evasion.
The bench of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) has observed that unless and until, the appellant/assessee 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 bench noted that 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.
The Appellant/assessee, M/s Gurukripa Shahenshah Veg. & Non-Veg. Restaurant, is a sole proprietorship firm run by Sh. Charan Pal Singh, is primarily engaged in Restaurant-cum- Bar services.
The Appellant was registered with the Commercial Taxes Department and had been granted Bar License by the State Excise Department for providing services in relation to Restaurant-cum-Bar services.
The appellant had installed an air conditioner in its premises from 14.07.2010. The license granted to Appellant’s Restaurant & Bar Services was renewed regularly for the year 2011-12, 2012-13 and 2013-14.
The Department alleged that as there was air conditioning facility, the restaurant service was exigible to service tax.
A show cause notice was issued, which was adjudicated. Aggrieved, the appellant filed an appeal before the Commissioner (Appeals) who upheld the order.
The CESTAT held that the extended period of limitation is clearly applicable as the appellant suppressed the correct fact with regard to the facility of AC being available at the restaurant and mis-represented and misguided the department with the sole intent to evade payment of duty. The intention to evade duty is writ large in the conduct of the appellant and it cannot be said to be a case of bonafide belief of non liability of service tax or a case of ignorance of service tax liability. For the said reasons, penalties under section 77(1)(a), 77(2) and 78 of the Finance Act, 1994 are also confirmed.
Case Details
Case Title: Gurukripa Shahenshah Veg. & Non-veg. Restaurant Versus The Principal Commissioner, Central Goods, Service Tax and Central Excise
Case No.: Service Tax Appeal No. 50992 Of 2018
Date: 12.02.2025
Counsel For Appellant: M. B. Maheshwari
Counsel For Respondent: S. K. Meena
