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Commissioner of Service Tax-VII V/S Flemingo Duty Free Shop Pvt. Ltd.

    Final Order Nos. A/89737-89744/2017-WZB/STB in Appeal Nos. ST/87234-87241/2016-Mum

    Decided On, 28 September 2017

    At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai

    By, THE HONORABLE JUSTICE: RAMESH NAIR
    By, MEMBER AND THE HONORABLE JUSTICE: RAJU
    By, MEMBER

    For Petitioner: M.K. Sarangi, Joint Commissioner (AR) and M.P. Damle, Asstt. Commissioner (AR) And For Respondents: A.R. Krishnan, CA and Girish Raman, Advocate



Judgment Text


1. These are appeals filed by the Commissioner of Service Tax-VII, Mumbai, against Orders-in-Appeal passed by the Commissioner (Appeals), dismissing the Department's Appeals against the Orders-in-Original, sanctioning refund/rebate of the Service Tax paid on the rent paid by the Respondent to the Airport Authorities, for running their duty free shops situated in the departure lounge of various airports. In the instant case, the Respondent operates duty free shops in the departure and arrival modules at various International Airports. These duty free shops are beyond Customs Barriers, and are Bonded Warehouses.

2. Refund claims were filed by the Respondent claiming the benefit of Notification No. 41/2012-S.T dated 29-6-2012 seeking refund of Service Tax paid on the rent paid by them to the Airport Authorities for running their duty free shops situated in the departure lounge of various airports.

3. The Assistant Commissioner sanctioned refund of the Service Tax on such rent paid after having satisfied about the fulfillment of all the conditions prescribed in the said notification, and thus Orders-in-Original were passed in favour of the Respondent herein.

4. All the Orders-in-Original passed by the A.C., Service Tax-VII, Mumbai were examined under Section 84 of the Finance Act, 1994 and separate appeals were filed by the Department before the Commissioner (Appeals) on the following grounds, as quoted in Order-in-Appeal -

* The Refund sanctioning authority has erred 'in interpreting the Standing Order No. 03/2008 dated 3-3-2008 issued under F. No. Air Cus/67-01/2008 by the Commissioner of Customs Mumbai, inasmuch as the said Standing Order pertains to instructions on sale of non-duty paid goods by Duty Free shops (DFS) to only international passengers. The Refund sanctioning authority erred in interpreting the same to mean that such sale will tantamount to export.

* The Refund sanctioning authority has, failed to appreciate the definition of "export" as given under Section 2(18) of the Customs Act, 1962 wherein "Export" is defined as below:

"export with its grammatical variations and cognate expressions means taking out of India to a place outside India"

* The Refund sanctioning authority erred in interpreting the same as sale by Duty Free Shop to international passengers in the departure lounge. Export under the Customs Act, 1962 means physical export of the goods out of the country. The Refund sanctioning authority did not appreciate the fact that such sale of goods took place in Indian Territory and only then the goods were physically taken out of India and that too by individual international passengers. By no stretch of imagination can it be construed that the Duty Free Shop has exported the goods inasmuch as the title of the goods is transferred to the passenger in the event of sale of goods by Duty Free Shop along with the consequent responsibilities pertaining to any tax or duty.

* The Refund sanctioning authority also did not appreciate that the goods sold to international passengers in the departure lounge of airports have not been imported inasmuch as the goods have not crossed Customs boundary. This view has been confirmed by the Hon'ble Supreme Court of India in the case of Hotel Ashoka v. Assistant Commr. of Commercial Taxes as reported in : 2012 (276) E.L.T. 433 (S.C.). The Hon'ble Supreme Court of India in the aforesaid judgment h

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as clearly held that when any transaction takes place outside the customs frontiers of India, the transaction would be said to have taken place outside India. Hence, the Refund Sanctioning Authority erred in not appreciating the fact that the goods sold to international passenger in the departure lounge had never crossed the customs frontier of India and hence the sale of the same cannot be termed as taking out of India to a place outside India inasmuch as the goods were never in India. Thus, the refund sanctioning authority failed to appreciate that the goods which have not completed the act of importation cannot be exported.

* Further, reliance is placed on the case of Flemingo Duty Free Shops Pvt. Ltd. v. State of Karnataka reported at: 2009 (248) E.L.T. 69 (Kar.) also in their support.

* Assuming but not accepting the fact that the transactions did happen in the Indian Territory, the Refund sanctioning authority has not appreciated the fact that the Duty Free Shop has sold the non-duty paid goods, which has been warehoused and has not been imported into India, to international passengers while still in the Indian Territory. By no stretch of imagination, the same can be considered as physical export of goods. It is only the individual passengers who would take the goods outside India and not the Duty Free Shop.

* As per Notification No. 41/2012-S.T dated 29-6-2012, rebate is admissible for taxable services used for export of the goods. Export is defined under Section 2(18) of the Customs Act, 1962, wherein export means taking out of India to a place outside India. In this case, the goods in 'question are warehoused goods which have not crossed customs barrier either for import or for export (Section 68 and Section 69 of the Customs Act, 1962).

* The Refund Sanctioning Authority has not appreciated the fact that the impugned goods are not manufactured in India. They are imported, warehoused and finally sold in departure lounge of airports. Hence, the sale of duty free goods in departure lounge does not satisfy the definition of exports.

* Assuming for the sake of discussion but not accepting the fact that the goods sold to individual passenger in the international departure lounge corresponds to export, even then the Refund Sanctioning Authority has not appreciated the fact that the services claimed as input service by the claimant are in no way related with the goods which is claimed to be exported. He has not appreciated the fact that the input service of renting of space at the departure module of International Airport in this case has no nexus with the claimed exported goods in as much as the space so rented by the Duty Free Shop does not have any co-relation with the individual passengers carrying the goods outside the territory of India.

* The Refund Sanctioning Authority has not appreciated the fact that at the point of sale of non-duty paid goods to the individual international passenger, the Duty Free Shop has recovered all the duty/tax it has incurred in the course of sale of the goods. Thus, in the instant case, there also arises a question of unjust enrichment inasmuch as the price of sold goods also include the expenditure incurred in owning and maintaining the duty free shops. Hence, the respondent has by issuance of invoice for sale of goods has also recovered the expenditure incurred in owning and maintaining the duty free shop. Hence, the refund is also barred by unjust enrichment.

5. Commissioner (Appeals) dismissed the Department's Appeals by passing detailed reasoned Orders. The supply of goods was considered as 'exports' when cleared from Bonded Warehouse. Respondent was considered as exporter, goods as 'export goods' within the meaning assigned in Section 2(18) to 2(20) of the Customs Act, 1962. Goods were treated as 'imported goods for warehousing' under Chapter IX of Customs Act. Direct nexus was found of renting space with the export sales of Respondent. Doctrine of unjust enrichment was considered inapplicable in case of export of goods. As quoted in the Department's Appeals, the Commissioner (Appeals), inter alia, observed that;

> as per section 71 of the Customs Act, since the goods were not cleared for home consumption, the goods that were sold at the duty free shop could be regarded as 'exports' as no Customs duty was levied on the same when cleared out of warehouse;

> the respondent would be considered as an exporter and, the goods sold at the departure duty free shops to be export goods, within the meaning assigned in section 2(18) to (20) of the Customs Act;

> the goods were brought from foreign countries into India and warehoused as imported goods in terms of Chapter IX of the Customs Act, hence the same shall have to be treated as imported goods under Customs Act;

> the renting of airport premises at the departure module has a direct nexus with the export sale being made by the respondent as it is not possible to carry on the export sales at the Duty Free Shop at the departure terminals, without taking the duty free shops on rent from the Airport Authority of India;

> there is no application of doctrine of unjust enrichment in case of export of goods.

6. Chief Commissioner of Service Tax reviewed these Orders-in-Appeal under Section 86(2A) of the Finance Act, 1994 and directed filing of these Appeals against such Orders-in-Appeal passed by the Commissioner (Appeals).

7. In these Appeals, the following grounds are raised by the Department-

'2. On examination of the Order-in-Appeal No. MUM-SVTAX-002-APP-143 to 146-16-17, dated 24-5-2016 (received in Service Tax-VII Commissionerate on 30-5-2016) passed by the Commissioner (Appeals), Service Tax-II, Mumbai, in respect of M/s. Flemingo Duty Free Shop Pvt. Ltd., it is found that the Order-in-Appeal is not legal, proper and hence, the same is fit to be contested by filing appeal before the Customs, Excise & Service Tax Appellate Tribunal, Mumbai under Section 86(2A) of the Finance Act, 1994 (32 of 1994) on the following grounds:

2.1 The refund has been granted under Notification No. 41/2012-S.T. dated 29-6-2012 which reads...

"the Central Government, on being satisfied that it is necessary in the public Interest so to do, hereby grants rebate of service tax paid (hereinafter referred to as rebate) on the taxable services which are received by an exporter of goods (hereinafter referred to as the exporter) and used for export of goods, subject to the extent and manner specified herein below, namely:

Provided that-

(a) the rebate shall be granted by way of refund of service tax paid on the specified services.

Explanation. - For the purposes of this notification,-(A) "specified services" means-

(i) in the case of excisable goods, taxable services that have been used beyond the place of removal, for the export of said goods; (ii) in the case of goods other than (i) above, taxable services used for the export of said goods; but shall not include any service mentioned in sub-clauses (A), (B), (BA) and (C) of clause (I) of rule (2) of the CENVAT Credit Rules, 2004;".....

"(d) no CENVAT credit of service tax paid on the specified services used for export of goods has been taken under the CENVAT Credit Rules, 2004;...."

On perusal of the Notification, it is clear that the Notification provides for rebate of service tax paid on taxable services which are received by an exporter. In the situation at hand, the claimants are selling their goods from their duty free shops to the passengers, in India. With the event of sale the ownership of goods changes and it is no more with the claimant. Subsequent movement of the goods by the new owner does not make the duty free shop exporter and therefore they do not seem to be eligible for refund under Notification No. 41/2012-S.T dated 29-6-2012. In view of the above, it appears that the Commissioner (Appeals), has erred in determining the goods sold at departure terminals situated at the Airports as export.

2.2 Also, since they are selling, the goods to their buyers it is most likely that they would have loaded their input costs on the sale price of the goods, which is a common business practice. No evidence has been discussed about the same by the Learned Commissioner (Appeals) to the effect that such cost of input service tax were not loaded on to the sale price of the goods. Thus, if the input service tax etc. is already a part of sale price of the goods, further refund of the same to the claimant may result in unjust enrichment.

2.3 Argument put forth by the Learned Commissioner (Appeals) at para-13 of his order reads:-

"It is observed that in the case of Hotel Ashoka, the question before the Hon'ble Supreme Court was whether sale of goods at the duty free shops at the international airport are liable to sales tax VAT under the Karnataka Value Added Tax Act. The Hon'ble Supreme Court found that the goods kept in the bonded warehouse had not crossed the customs frontier of India, since they were not brought into India after clearance from Customs. Therefore, it was held that before the goods were imported into country they had been sold at the duty free shops and hence no sales tax was leviable. The Court observed as follows:-

18. It is an admitted fact that the goods which had been brought from foreign countries by the appellant had been kept in bonded warehouses and they were transferred to duty free shops situated at International Airport of Bengaluru as and when the stock of goods lying at the duty free shops was exhausted. It is also an admitted fact that the appellant had executed bonds and the goods, which had been brought from foreign countries, had been kept in bonded warehouses by the appellant. When the goods are kept in the bonded warehouses, it cannot be said that the said goods; had crossed the customs frontiers. The goods are not cleared from the customs till they are brought in India by crossing the customs frontiers. When the goods are lying in the bonded warehouses, they are deemed to have been kept outside the customs frontiers of the country and as stated by the learned senior counsel appearing for the appellant, the appellant was selling the goods from the duty free shops owned by it at Bengaluru International Airport before the said goods had crossed the customs frontiers.

19. Thus, before the goods were imported in the country, they had been sold at the duty free shops of the appellant.

* * * *

24. If this is the factual and legal position, in our opinion, looking to the provisions of Article 286 of the Constitution, the State of Karnataka has no right to tax any such transaction which takes place at the duty free shops owned by the appellant which are not within the customs frontiers of India."

In fact it emboldens the department's contention that the goods, in fact are moving from a foreign country to another foreign country and, not from Indian territory to a foreign country and therefore doesn't fit in the definition of export provided under section 2(18) of the Custom Act, 1962."

8. We heard both sides at length and carefully perused the documents available on record, the statutory provisions with Rules, and have considered the rival submissions.

9. The Department heavily relies on Article 286 of the Constitution of India and the judgment in Hotel Ashoka v. Asstt. Commissioner of Commercial Taxes : 2012 (276) E.L.T. 433 (S.C.), which was also rendered in the case of similar "duty free shops". On the basis of the said judgment, the Duty Free Shop which is Customs Bonded Warehouse is considered by the Department as a space outside India. The said judgment was rendered by the Hon'ble Supreme Court after taking into consideration Article 286 of the Constitution of India, which reads as under-

"286. Restrictions as to imposition of tax on the sale or purchase of goods.-

(1) No law of a State shall impose, or authorise the imposition of, a tax on the supply of goods or of services or both, where such supply takes place-

(a) outside the State; or

(b) in the course of the import of the goods or services or both into, or export of the goods or services or both out of, the territory of India.

(2) Parliament may by law formulate principles for determining when a supply of goods or of services or both in any of the ways mentioned in clause (1)."

10. In view of the above the following issues arise for our consideration-

(a) Whether the levy of Service Tax paid by the Respondent is authorised by law in view of provisions of Finance Act, 1994 read with Article 286 of the Constitution of India?

(b) Whether the sales of goods at duty free shops to International passengers is 'exports' by the duty-free shops for the purpose of Notification No. 41/2012-S.T dated 29-6-2012, in the context of Section 2(18) of the Customs Act, 1962?

(c) Whether conditions of Notification No. 41/2012-S.T dated 29-6-2012 for seeking rebate/refund were satisfied?

(d) Whether the bar of 'unjust enrichment' is applicable?

(e) Whether the impugned Orders-in-Appeal are legal and proper?

11. On the first issue, it is seen that in terms of Article 286(1) of the Constitution of India, no Tax can be imposed on the supply of goods and/or services, where such supply takes place -

(i) outside the State; or

(ii) in the course of import of goods and/or services into the territory of India; or

(iii) in the course of export of goods and/or services out of the territory of India.

12. In view of the said constitutional embargo, sales in the duty-free shop at International Airport of Bengaluru was considered as not taxable under the Sales Tax/VAT Act, by the Hon'ble Supreme Court in Hotel Ashoka (supra), and it was held that-

"18. It is an admitted fact that the goods which had been brought from foreign countries by the appellant had been kept in bonded warehouses and they were transferred to duty free shops situated at International Airport of Bengaluru as and when the stock of goods lying at the duty free shops was exhausted. It is also an admitted fact that the appellant had executed bonds and the goods, which had been brought from foreign countries, had been kept in bonded warehouses by the appellant. When the goods are kept in the bonded warehouses, it cannot be said that the said goods had crossed the customs frontiers. The goods are not cleared from the customs till they are brought in India by crossing the customs frontiers. When the goods are lying in the bonded warehouses, they are deemed to have been kept outside the customs frontiers of the country and as stated by the learned senior counsel appearing for the appellant, the appellant was selling the goods from the duty free shops owned by it at Bengaluru International Airport before the said goods had crossed the customs frontiers.

19. Thus, before the goods were imported in the country, they had been sold at the duty free shops of the appellant.

20. In view of the aforestated factual position and in the light of the legal position stated hereinabove, it is very clear that no tax on the sale or purchase of goods can be imposed by any State when the transaction of sale or purchase takes place in the course of import of goods into or export of the goods out of the territory of India. Thus, if any transaction of sale or purchase takes place when the goods are being imported in India or they are being exported from India, no State can impose any tax thereon.

23. Looking to the aforestated legal position, it cannot be disputed that the goods sold at the duty free shops, owned by the appellant, would be said to have been sold before the goods crossed the customs frontiers of India, as it is not in dispute that the duty free shops of the appellant situated at the International Airport of Bengaluru are beyond the customs frontiers of India i.e. they are not within the customs frontiers of India.

24. If this is the factual and legal position, in our opinion, looking to the provisions of Article 286 of the Constitution, the State of Karnataka has no right to tax any such transaction which takes place at the duty free shops owned by the appellant which are not within the customs frontiers of India"

"30. They again submitted that 'in the course of import' means 'the transaction ought to have taken place beyond the territories of India and not within the geographical territory of India'. We do not agree with the said submission. When any transaction takes place outside the customs frontiers of India, the transaction would be said to have taken place outside India. Though the transaction might take place within India but technically, looking to the provisions of Section 2(11) of the Customs Act and Article 286 of the Constitution, the said transaction would be said to have taken place outside India. In other words, it cannot be said that the goods are imported into the territory of India till the goods or the documents of title to the goods are brought into India. Admittedly, in the instant case, the goods had not been brought into the customs frontiers of India before the transaction of sales had taken place and, therefore, in our opinion, the transactions had taken place beyond or outside the custom frontiers of India."

13. The position in the matter of Service Tax is not different. Clause (5) of the 'Place of Provision of Services Rules, 2012' notified by Notification No. 28/2012-S.T.,dated 20-6-2012, w.e.f. 1st July, 2012, leaves no doubt that the place of provision of services relating to immovable property in the instant case is the place where the immovable property in this case Customs Bonded warehouse (Duty-Free Shop) is located, which admittedly is beyond customs barriers in nontaxable territory. Clause (5) of the said Rules read as under -

"5. Place of provision of services relating to immovable property. - The place of provision of services provided directly in relation to an immovable property, including services provided in this regard by experts and estate agents, provision of hotel accommodation by a hotel, inn, guest house, club or campsite, by whatever, name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including architects or interior decorators, shall be the place where the immovable property is located or intended to be located."
In the case of rent paid for the space of duty free shops, the place of provision of services is thus the place where duty free shop is located, which is admittedly beyond Customs Frontiers.

14. Even in the Integrated Goods and Services Tax Act, 2017, as per Section 13(4) the place of supply of services remains the place where immovable property is located. Section 13(4) reads as under -

"13(4) The place of supply of services supplied directly in relation to an immovable property, including services supplied in this regard by experts and estate agents, supply of accommodation by a hotel, inn, guest house, club or campsite, by whatever name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including that of architects or interior decorators, shall be the place where the immovable property is located or intended to be located."
15. Section 66B of the Finance Act, 1994, permits levy of Service Tax only on the Services provided or agreed to be provided in the taxable territory, in tune with Article 286 of the Constitution of India. Section 66B of Finance Act, 1994 (as amended), reads as under -

"66B. Charge of service tax on and after Finance Act, 2012. - There shall be levied a tax (hereinafter referred to as the service tax) at the rate of fourteen per cent on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed."
16. The Service provided by way of rent of place where immovable property i.e. duty free shop is located, admittedly being beyond Customs Frontiers and not within taxable territory, Service Tax cannot be charged on such rentals. Even in the new GST regime there is no departure from this legal position.

17. Further, Section 65B, clearly interprets the words 'taxable service' and 'taxable territory', in clause (51) and (52) as follows -

"(51) "taxable service" means any service on which service tax is leviable under Section 66-B;

(52) "taxable territory" means the territory to which the provisions of this chapter apply;"

A non-taxable territory is interpreted in clause (35) of Section 65B as follows-

"(35) "non-taxable territory" means the territory which is outside the taxable territory;"
18. In the instant case, there is no dispute that the duty-free shops, whether in arrival or departure lounge, of the International Airports are beyond the customs frontiers. Thus, they are outside the taxable territory and thus in non-taxable territory. The Grounds taken in the Appeal also show that the department deems these duty free shops in foreign territory. Since, the rent is paid for the rental space in arrival or departure lounge area in non-taxable territory, the same therefore is not a taxable service.

19. Therefore, no Service Tax is chargeable at the first instance on rent for rental of Customs Bonded Warehouse (Duty Free Shop), whether it be in the arrival lounge or in the departure lounge. The levy of Service Tax paid by the Respondent is therefore not authorised by law in view of provisions of Finance Act, 1994 read with Article 286 of the Constitution of India.

20. However, the Service Tax has been collected on the rent so paid for the duty-free shops. This Service Tax collected is in the nature of tax collected without authority of law. The Respondent would therefore be entitled for seeking refund of such tax collected without authority of law for non-taxable services.

21. However, the Respondent has sought refund of Service Tax paid only so far as the duty free shops at the departure lounge is concerned by claiming benefit of Notification No. 41/2012-S.T dated 29-6-2012 for seeking rebate/refund. The lower authorities have found them eligible for such refund in the context of the said Notification. The issue was not examined in the context of refund of tax collected without authority of law.

22. We have gone through the detailed findings of the Commissioner (Appeals). Considering the payment of Service Tax on rent amount paid to Airport Authority for the duty free shops. After following due procedure, the Assistant Commissioner, sanctioned the refund of service tax paid on the rent paid for running the duty free shops situated in the departure lounge of the International airports.

23. The Commissioner (Appeals) has recorded clear finding that the entire movement and sale of articles at the duty free shops of the respondent happen under customs supervision and control and in accordance with Chapter IX of the Customs Act dealing with "warehousing of goods". The respondent files a bill of entry for warehousing treating the duty free goods imported by it to be imported goods as per procedure prescribed in Customs Act for bringing goods into duty free shop. Thus, the Respondent can be deemed as 'importer' for Section 58 of the Act which allows imported goods to be warehoused without payment of duty on execution of a bond. It is also not disputed by either side that as per Public Notice No. 154/2004, dated 22-7-2004 issued by the Commissioner of Customs, Airport and Air Cargo Complex, Chennai and a Standing Order No. 3/2008, dated 3-3-2008 issued by the Commissioner of Customs, CSI Airport, Mumbai, relating to the customs procedure for operation of duty free shops, all the procedure have been complied with by the respondents. There is no dispute regarding the fact that the respondent has claimed rebate of service tax paid only on the rentals of its duty free shops located at the departure terminals from where goods are sold to international passengers going abroad. There is no dispute that the dutiable goods were not cleared for home consumption on payment of any duty from such duty free shops. The sale of goods at the duty free shops can only be regarded as cleared for exports u/s. 69 of the Act. It is further not disputed that the Respondent's operation of duty free shops is fully controlled under the Customs Act, 1962. As per Section 69 of the Act, the warehoused goods can be exported out of country. As per Section 71 of the Act, the goods deposited in a warehouse without payment of duty cannot be taken out of the warehouse except for clearance for home consumption or re-exportation or for removal to another warehouse or as otherwise provided by the Act. It is not the case of the department that the duty free goods sold at the duty free shops are cleared for home consumption or for removal to another warehouse or are removed as otherwise provided by the Act. It therefore follows that the goods that are sold at the duty free shop can only be regarded as 'exports' as no customs duty is levied on the same, when cleared out of the warehouse. Further, the Commissioner (Appeal) has also relied upon a Public Notice No. 154/2004 dated 22-7-2004 issued by the Customs, Chennai and Standing Order No. 3/2008 dated 3-3-2008 issued by the Mumbai, Customs which have considered the sale voucher issued by Duty free shop to be a shipping bill u/s. 69, which substantiates that the goods sold at the duty free shops have to be considered as exports. It is not the case of the Department that the sales are to passengers travelling on domestic flights. The Commissioner (Appeal) has also recorded that it is admitted by the department in para 11(c) of the grounds of appeal that the goods were physically taken out of India by the individual international passengers. Therefore, there is no reason to disturb the findings to deny refund to the Respondent.

24. There is no dispute on the fact that it is not possible to carry on the export sales at the Duty Free Shop at the departure terminals, without having a space there, which can only be possible by taking the duty free shops on rent from Airport Authority of India. In view of the above, the renting of airport premises at the departure module has a direct nexus with the export sale being made by the Respondent.

25. Thus, we do not find any error in the findings recorded for being satisfied with the compliance of conditions of the Notification No. 41/2012-S.T dated 29-6-2012.

26. We have already pointed out that the Service Tax is collected without authority of law. Such collection of tax on services which are not taxable services, entitles the Respondent for grant of refund. In any event elaborate findings are recorded by the Commissioner (Appeals) even on the issue of inapplicability of the bar of unjust enrichment. The Commissioner (Appeals) has examined the export invoices issued to the international passengers, which is also countersigned by the Customs Officers. No duty or taxes are charged or recovered in the said export invoice. Hence, no incidence of tax or duty has been passed on to their buyer international passengers.

27. We agree with the contention of the Respondent, appreciated by the Commissioner (Appeals) that the Duty Free Shop exists solely for the purpose that the international passengers are able to buy the goods without payment of customs duty/state excise duty and other applicable taxes. The very essence of Duty Free Shop is to ensure that the buyer at the Duty Free Shop does not bear any duty or tax burden.

28. The unjust enrichment provisions are not available to deny refund in a case like this relating to non-taxable territory for Tax Free sales in Duty Free Shops.

29. Several binding precedents have been relied upon by the Commissioner (Appeals) to hold that the doctrine of unjust enrichment does not arise in case of Export transactions as per clause (a) of proviso to Section 11B(2) of Central Excise Act, 1944 as applicable to Service Tax vide Section 83 of Finance Act, 1994. The refund is claimed pursuant to Section 93A of the Finance Act, 1994 (the law governing service tax) read with Notification No. 41/2012-S.T. dated 29-6-2012. The following precedents are rightly relied upon -

(i) Vodafone (India) Ltd : 2015 (40) S.T.R. 699 (Tri.-Mumbai.), wherein this Tribunal held as under:

"6.......... We further observe that while disposing of the appeal filed by the Revenue, we have also observed that the transaction involved is one of export, and therefore, the service provider is rightly entitled for the refund of the Service Tax paid. The learned Counsel for the respondent also submits that even in respect of the export transaction; if tax is recovered from the customers, the same would not disentitle the tax payer from claiming refund as held by the Hon'ble Bombay High Court in the case of Uttam Steel Ltd. v. Union of India : 2003 (158) E.L.T. 274. The Hon'ble High Court in the said decision while considering the rebate of duty under Rule 12 of the Central Excise Rules on export of goods had held as follows:

"41. As stated hereinabove, right to rebate of duty accrues under Rule 12 on export of goods. That right is not obliterated if the application for rebate of duty is not filed within the period of limitation prescribed under Section 11B. In fact, Rule 12 of the Excise Rules empowers the Excise Authorities to grant rebate of duty even if some of the procedural requirements are not fulfilled. Even proviso (a) to Section 11B(2) clearly provides that in the case of rebate of duty, the rebated will be granted to the exporter even if the duty element is passed on by the exporter. Thus, under Section 11B, the amount of Excise duty is refunded to the exporter even if the duty element is passed on by the exporter."

(ii) Converges India Services P. Ltd. v. Commissioner of Service Tax, New Delhi : 2012 (25) S.T.R. 251;

(iii) Balkrishna Textiles P. Ltd. v. Commissioner of Central Excise, Ahmedabad - 2009 (239) E.L.T. 279, upheld by the Hon'ble High Court of Gujarat reported in 2011 (272) E.L.T. A164 (Guj).

Therefore, the findings cannot be said to be illegal or improper.

30. We are of the view that the judgment of the Hon'ble Supreme Court in Hotel Ashoka (supra) do not help the Department to retain the amount paid as Service Tax on rent paid for the said Duty-Free Shops, by denying the refund/rebate thereof. There is no valid ground to deny the refund/rebate, by upsetting concurrent findings of lower authorities. The Appeals are accordingly dismissed
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