TMI Blog2009 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... ackaged Commodities) Rules, 1977, dealing with imported goods are not applicable to the goods of the petitioner brought from other countries and sold at its Duty-free Shops located in the international departure terminal of the Bangalore International Airport. Consequently, Annexures - J and L, to the writ petition are quashed. - 16296 of 2007 - - - Dated:- 22-7-2009 - Anand Byrareddy, J. [Order]. - Heard the Counsel for the petitioner and the Advocate General on behalf of the respondents. 2. The factual background is as follows : The petitioner is a company incorporated under the Companies Act, 1956. It is a subsidiary of M/s. Flemingo International Limited, Dubai. The petitioner has set-up "Duty-Free Shops" at various international airports in India. This was enabled by the Airports Authority of India (hereinafter called 'AAI' for brevity) calling for tenders to construct, develop and operate such shops at several International airports, including the Bangalore International Airport (hereinafter referred to as 'BIA' for brevity). The petitioner's parent company was a successful bidder. The AAI had awarded a licence in the year 2004 to establish and operate Duty-Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods they take them out of India, without passing or re-passing, through the Customs Frontier - since they would have crossed it before entering the Duty-free shop. Hence, the goods brought by the petitioner from abroad, when sold to outgoing passengers, such goods leave the country without becoming part of the "mass of goods within the country" and thus the import cannot be said to be completed as it does not cross the Customs Frontier, before being taken out of the country. In this background, it is alleged that on 26-9-2007, the second respondent is said to have inspected the Duty-Free Shop located at the Departure Terminal of BIA and seized eight packages of Cigarettes, brought from abroad and kept for sale to going passengers, on the ground that the packages did not contain the importer's address apart from other requirements under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (hereinafter referred to as the "Packaged Commodities Rules', for brevity) and under the Standards of Weights and Measures Act, 1976 (hereinafter referred to as 'the SWM Act' for brevity). The second respondent however, obtained an undertaking from the petitioner's represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the latter Act. The sales being sales in the course of import or export, the transactions do not constitute sales within the State. Reliance is placed on the ruling of the Supreme Court in State of Karnataka v. B.M. Ashraf and Co., (1997) 8 SCC 468 - wherein it was laid down that merely because geographically a sale takes place in a particular State, the nature of the transaction does not detract from its character as a sale in the course of import or export. It is contended that the invocation of the Packaged Commodities Rules in respect of goods sold by the petitioner is misconceived as the said Rules, namely, Rule 6 and Rule 35 would not apply to the goods of petitioner as the same can be applied only to goods that have been cleared through customs and sold to the general public. Though the incoming passengers purchasing the goods and pass through customs could be treated as importers. It is contended that the goods sold by the petitioner are brought into India and kept in ware houses under the custody and control of Customs Authorities, the petitioner is not in a position to change the packaging. The petitioner has no control over the packaging. The insistence of the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contend : That the proceedings are under the SWM Act and not the SWM (Enforcement) Act. The transaction not being an intraState sale, the location of the shop in Bangalore Airport would not render the nature of the transaction as an mtra-State sale. The transactions would be sales in the course of import and export in respect of the goods. The goods displayed by the petitioner cannot be the subject matter of an inira-State or inter-State sale. It is contended that the words used in Section 2(23) of the Customs Act and Section 2(i) of the SWM Act being identical, the contention that it was not relevant whether the commodities involved are meant for sale in the course of import or export - is not justified. There is nothing in the Act to indicate that the legislative intent was different and that a different meaning was to be given to the same words. The Legislature was fully aware of the interpretation of the expression by the Supreme Court (as early as in 1963 in Re. The Bill to amend the Sea Customs Act, AIR 1963 SC 1760) when drafting the SWM Act and SWM (Enforcement) Act. Hence, the same interpretation ought to be adopted in the absence of any difference in wording. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be indicated in rupees. However, the goods are sold against foreign currency, the price is marked in dollars - the price indicated in rupees would vary on a daily basis on account of the exchange rate fluctuations. It is contended that for all of the above reasons, there is a physical impossibility in the petitioner being able to comply with the Rules. 6. On these rival contentions, it is seen that the petitioner operates Duty-free Shops at the international arrival and departure terminals of the BIA. The said shops are customs bonded ware houses within the meaning of Section 58 of the Customs Act. The goods sold are brought from abroad and are packaged commodities. The same can be sold only to international travellers with travel documents and only against approved foreign currency. The goods displayed are brought from customs bonded ware houses and are goods which are not cleared for home consumption. The movement of the goods at all times remains under the control and supervision of the Customs authorities. Therefore, it is to be whether the nature of goods in the Duly-free Shops of the petitioner, in the departure and arrival terminals of the BIA,. are imported goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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