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2018 (4) TMI 614

round that since the Respondent is not an exporter, hence not eligible for the refund - N/N. 41/2012 – ST dt. 29.06.2012 - Held that: - There is no dispute that the goods were not cleared for home consumption, warehouse transfer or any other purpose but to International passenger for taking the goods outside India at departure terminal. Hence it is clear that the clearance was made for export of goods only. - In terms of Para 3.3 of the Standing order dt. 03.03.2008 and Para 4.3 of Public Notice dt. 27.02.2006 it has been clarified that for the purpose of Section 69 the sales voucher/ bills issued by the assessee to the passenger shall be deemed to be shipping bill u/s 50 of the Act for the purpose of export and further that the goods can only be sold to international passenger. Hence it has to be accepted that the sale of goods at Duty free Shop at the departure terminal is exports. - The shop, known as ‘ Indian Gourmet’, is located only at the terminals of Mumbai International Airport, for which separate invoice was raised by the Mumbai International Airport Ltd to the Respondent. In such case, the Respondent is eligible to avail rebate of whole amount of service tax cha .....

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ich have been used in export of goods. The adjudicating authority rejected all the claims. The Respondent filed appeal before Commissioner (Appeals) who allowed the appeals and set aside the order-in-original. Hence the revenue has filed the present appeal on the following grounds: (i) 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 Appellant are selling their goods from 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 Respondent. 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 - St dt. 29.06.2012. (ii) The Respondent are selling the goods to their buyers it is most likely that they would have loaded their inputs costs on the sale price of the goods, which is a common business practice. No evidence has been talked about by the Appellate Authority to the effect that such input service tax etc. were not loaded on to the sale price of the goods. Thus, if the input service tax is alrea .....

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in all such cases will be international passenger. The claimant is not exporter and hence cannot claim the benefit of refund. (vii) The certificate issued by the auditor is based on various riders and the Auditors do not commit any accuracy or correctness of the data submitted and put back the entire onus on to the management. The Auditor on the one hand certified that the refund claim is in accordance with the provisions of Notification No. 41/2012 - ST while on the other hand has nullified the effect of certification by including a rider in the certificate to the effect that he has not verified the compliance of the Service tax or the central excise act. Since the certificate is not proper the refund claim is liable to be rejected. 2. Shri Roopam Kapoor, ld. Commissioner, AR appearing for the revenue reiterates the grounds of appeal. He also submits that Duty free shop is in India where the Customs Act are applicable. At the time of receipt of the goods the IGM, Bill of Entry was filed and hence the goods entered in the territory of India. The goods were not exported as Export General manifest is not filed. Only when the goods are handed over to the passenger for taking outside I .....

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or taking the goods outside India at departure terminal. Hence it is clear that the clearance was made for export of goods only. In terms of Para 3.3 of the Standing order dt. 03.03.2008 and Para 4.3 of Public Notice dt. 27.02.2006 it has been clarified that for the purpose of Section 69 the sales voucher/ bills issued by the assessee to the passenger shall be deemed to be shipping bill u/s 50 of the Act for the purpose of export and further that the goods can only be sold to international passenger. Hence it has to be accepted that the sale of goods at Duty free Shop at the departure terminal is exports. Further the goods are under Bond and the Bond is discharged u/s 73 when goods are cleared for home consumption/ exportation. We also find that this bench of the Tribunal in the Respondent s own case on the same issue has passed Final order No. A/89737-89744/17/STB dt. 16.08.2017 wherein the case was decided in assessee s favour. 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 .....

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her 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. Since the issue involved is same and of same assessee, in such circumstances we do not find any reason to deviate from the same. 5. The Revenue has also contended that the Respondent might have loaded their input costs on the sale price of the goods, which is common business practice and hence the refund claim of the Respondent may result in Unjust Enrichment. In this context, we find that in the Order-in-Original of the adjudicating authority did not make this aspect as a ground to reject the refund claim. Further, in case of exports, the question of unjust enrichment does not arise. The refund is claimed pursuant to Section 93 A .....

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al and, therefore, the Respondent is also eligible for the full rebate. Further, in case of processing / settlement charges charged by the bank for the card purchases made by the international passenger at the departure terminals at Mumbai, since the charges pertain to only departure terminal, therefore in such cases also the Respondent is eligible for full credit. The only issue now left to be decided is whether the balance service tax levied in respect of duty free shop located in Mumbai is available to what extent. We find that the Commissioner (Appeals) has allowed the claim to the Respondent on following grounds :- (i) The appellant has contended that all the amounts charged by MIAL are essentially in the nature of rent, since what the appellant essentially gets is only use of space for putting up a store and selling products. The fact that some of the payments are based on revenue generated by a particular shop would not make a difference in the nature and character of payment, which is essentially rent - Consideration for use of space. If the consideration paid to MIAL is rent for use of space, then it has to be apportioned based on the area of space. (ii) The Appellant s co .....

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te from the same as the rent charged for use of space and the consideration paid to Mumbai International Airport Ltd should be apportioned based on the area of space, hence the procedure of apportionment of rent arrived at by the Respondent is absolutely correct. We, therefore, do not find any reason to interfere with the order of the Commissioner (Appeals). 9. The Revenue also contended that the certificate issued by the Chartered accountant towards verification of claim does not serve any purpose as the auditors do not commit to any accuracy or correctness of the data submitted by the Respondent and has put back the entire responsibility / onus on the management. That the certificate is based on various riders and the auditor is not verifying the compliance of service-tax or central excise act. That the notification requires certain certification to be given by the statutory auditors, which is to be absolute and unqualified. As the Respondent has not submitted proper certificate, the refund claim is liable to be rejected. We find that in terms of Notification No, 41/2012 clause 3 (h) (B) and (i), the statutory auditors are required to certify that - (i) The input services have be .....

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