The recent order by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Ahmedabad in the case of Bittu Travels vs. Commissioner of Central Excise & Service Tax addresses the exemption claim related to Rent-a-Cab services provided within a Special Economic Zone (SEZ). The central issue in this case revolves around the requirement for supporting invoices to substantiate the exemption claim. This article provides a detailed analysis of the CESTAT Ahmedabad’s order and its implications.
1. Background: The appellant, Bittu Travels, faced a service tax demand of Rs. 2,33,883, which was initially confirmed by the Adjudicating Authority and upheld by the Commissioner (Appeals). The primary contention raised by the appellant throughout the proceedings was that the Rent-a-Cab service was provided to a Special Economic Zone (SEZ) and, therefore, should be exempt from taxation.
2. Appellant’s Argument: The appellant, represented by learned Counsel Shri Parth Rachchh, contended that they had clearly demonstrated in their statutory records, such as balance sheets and ledgers, that the Rent-a-Cab service was provided to an SEZ unit. Despite providing this evidence, the demand was confirmed by the Commissioner (Appeals). The appellant’s stance remained that the demand was not sustainable, as services provided to SEZ units are exempt from taxation.
3. Revenue’s Response: Shri Anoop Kumar Mudvel, learned Superintendent representing the Revenue, reiterated the findings of the impugned order, supporting the demand.
4. CESTAT’s Observations: After carefully considering the submissions from both parties and reviewing the records, the CESTAT Ahmedabad noted that the appellant’s sole defense was that the Rent-a-Cab service was provided within an SEZ and should, therefore, be exempt. However, the CESTAT observed that the appellant had claimed to have submitted various documents, including balance sheets and ledgers, but crucially lacked invoices to substantiate their claim.
5. Invoice Requirement: The CESTAT emphasized the need for invoices as essential evidence to establish that the service was indeed provided to an SEZ unit. In this context, the CESTAT asserted that it is the responsibility of the appellant to provide copies of invoices or any documents that can conclusively demonstrate the provision of services to an SEZ. Since the appellant failed to produce invoice copies or any such supporting documents, the CESTAT concluded that they could not establish their claim regarding the service being provided to an SEZ unit.
6. Upholding the Demand: Consequently, the CESTAT Ahmedabad upheld the demand against the appellant, stating that the demand was rightly sustainable. The appeal filed by the appellant was dismissed.
Conclusion: The CESTAT Ahmedabad’s order in the case of Bittu Travels vs. Commissioner of Central Excise & Service Tax underscores the importance of supporting invoices in exemption claims for services provided within Special Economic Zones (SEZs). In this case, the appellant’s failure to produce invoice copies or other compelling documents to substantiate their claim regarding SEZ services led to the rejection of their exemption plea.
This decision highlights the significance of proper documentation and record-keeping in taxation matters, especially when seeking exemptions. Businesses providing services to SEZ units or engaging in any tax-related claims must ensure they maintain comprehensive records and invoices to validate their assertions.
In summary, the CESTAT’s order reiterates the principle that exemption claims must be supported by concrete evidence, and the absence of such documentation can result in the rejection of such claims by tax authorities.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
1. In the present case service tax of Rs. 2,33,883/- was confirmed by the Adjudicating Authority and upheld by the Commissioner (Appeals). All along before the Adjudicating Authority as well Commissioner (Appeals), the appellant’s claim is that service of Rent-a-Cab was provided to SEZ therefore the same is not taxable.
2. Shri Parth Rachchh, learned Counsel appearing on behalf of the appellant submits that Rent-a-Cab service was provided to SEZ was shown in the statutory records such as balance sheet, ledger etc. submitted to the Adjudicating Authority however, despite all that the demand was confirmed by the Commissioner (Appeals). It is his submission that demand is not sustainable being the services provided to SEZ is exempted.
3. Shri Anoop Kumar Mudvel, learned Superintendent (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. On careful consideration of the submissions made by both the sides and perusal of record, we find that the only defense made by the appellant before the Adjudicating Authority as well as Commissioner (Appeals) is that service of Rent-a-Cabis provided in SEZ therefore the same is exempted however, though the appellant have claimed that they have submitted various documents such as balance sheet, ledger etc but both the lower authorities have denied the benefit for want of invoices which were not submitted by the appellant. Even when this bench asked to produce the invoice copy, the Counsel is unable to provide the same. Since the appellant have claimed the supply of service is to SEZ, it is incumbent on the appellant to provide copy of invoice in support of their defense whether the service is provided in SEZ and the same can be ascertained on the basis of invoice whereby it can be seen that service recipient is an SEZ unit. Since the appellant have failed to provide invoice copies or any document whereby it can be established that service is provided to SEZ therefore, we are of the view that the appellant could not establish their claim that the service is provided to SEZ. Hence the demand against the appellant is rightly sustainable and we uphold the impugned the order. The appeal filed by the appellant is dismissed.
(Pronounced in the open court on 05.09.2023)