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2022 (2) TMI 668 - AT - Service TaxRefund of service tax - duty free shops in airport - taxable territory in transactions involving goods sold to ‘outbound’ passengers - principles of unjust enrichment - time limitation - HELD THAT:- The appellant, admittedly, was not fastened with the statutory responsibility to deposit service tax in the Consolidated Fund of India but was liable to discharge the tax component of the payments, contractually claimed by the airport concession-holder, in periodical bills. However, under section 11B of Central Excise Act, 1944 as applied to Finance Act, 1994, appellant, having thus been saddled with the burden, is entitled to seek extraction of tax collected from the Consolidated Fund of India on establishing the absence of legislative intent. As the statutory enactment stipulates time-period beyond ‘relevant date’ for preferring such claims, that constraint on the assessee liable to tax, which, by default, is date of payment of tax, is similarly applicable to bearer of tax burden. The appellant filed the claims within one year from the date on which the Tribunal interpreted the law on levy of service tax as not intended to cover the business of the appellant - there was, thus, no legal ground to reject the claim as barred by limitation of time. In the meanwhile, the leviability of the impugned activity to tax was sought to be disputed through the refund route; the appellant, not being the assessee, was excluded from appellate remedy under Finance Act, 1994 against the charging of tax and claim for refund was the only alternative under the statute. It is not controverted that appellant sells goods and is, thereby, beyond the pale of tax on service on such sales. Without the ‘duty free’ specialist, the airport concession-holder would have to undertake this necessary, and cardinal, facilitation of international airports with such activity too being beyond the pale of tax on service. The goods stocked in these ‘duty free’ outlets are not liable to duties at the transaction stage and it has been consistently held that exemption from duty liability in the hands of the ‘duty free’ outlet flows from ‘taxable event’ occurring later on the arrival side and having occurred before access is afforded to the departure side - Undoubtedly, stocking and display is impossible without space and the sole issue that remains in the dispute is the finding of the lower authorities that space has been provided to the appellant and that the payment flow is ‘rent’ which is taxable within the meaning ‘airport service’ or ‘service’, as the case may be, for the period in dispute. ‘Duty free’ shops in airports are a global market competing among themselves in a ‘tax exempt’ environment and the compulsions of this business segment, wherein the consumers are not only knowledgeable but also sensitive about pricing, set it apart from a normal trading model which permits the underlying presumption of ‘cost plus’ implicit in the legislatively nuanced ‘unjust enrichment’ relied upon by lower authorities. It is also on record that the certificate of chartered accountant, an option that has been sanctified by judicial endorsement, was furnished with the claims for refund and is reasonable explanation for such impediment not having been alleged in the show cause notice. There is no finding on insufficiency or non- acceptability of this evidence of having borne the incidence of tax - The finding of applicability of ‘unjust enrichment’ is, thus, not only beyond the sanction of law but is also entirely superfluous as the notice issuing authority, cognizant of deficiencies – factual and cognitional – in the claim, had already mapped the boundaries within which claim would be adjudicated. Submissions on the interpretation of principle of restitution by the original authority that did not render a finding on bar of ‘unjust enrichment’ is too remote a crutch to substitute for the statutory mandate of section 128A(3) of Customs Act, 1962 which the first appellate, admittedly, did not resort to. The claims for refund were filed within the period permitted under section 11B of Central Excise Act, 1944, relate to levy which the law did not authorize for collection and which had been borne by the appellants - Appeal allowed - decided in favor of appellant.
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