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2017 (10) TMI 405 - AT - Service TaxRefund/Rebate claim - POPOS Rules - 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 - N/N. 41/2012-ST dated 29.06.2012 - Held that: - The Department heavily relies on Article 286 of the Constitution of India and the judgment in Hotel Ashoka vs Asstt. Commissioner of Commercial Taxes, [2012 (2) TMI 62 - Supreme Court of India], which was also rendered in the case of similar duty free shops, where it was held that the Duty Free Shop which is Customs Bonded Warehouse is considered by the Department as a space outside India. Clause (5) of the Place of Provision of Services Rules, 2012 notified by N/N. 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 non-taxable territory. 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 - 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. 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 - 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. Eligibility for refund - Held that: - 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 - 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. Unjust enrichment - Held that: - 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. Refund/ Rebate allowed - appeal dismissed - decided against Revenue.
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