2019 (10) TMI 1152 - AT - Service Tax

Rebate claim - unjust enrichment - user of input services for export of goods - Service tax borne by the Respondent-assessee, on the rent paid by them to Mumbai International Airport Ltd. (MIAL) for its two outlets in the International Airport at the departure terminal - export of goods or not - eligibility of benefit under N/N. 41/2012-ST, dated 29.6.2012. Export or not - whether the sale of goods from these two outlets of the respondent to the passengers going abroad amount to Export ? - HELD THAT - The respondent-assessee has procured duty/tax paid goods from domestic market and sold them at its departure terminal outlets located in the SHA to the international passengers going abroad. It is true that there was no option for the passengers going abroad but to take the goods out of India which were purchased by them from these two outlets of the respondent-assessee. Although according to the respondent these outlets are not the duty free shops, but had it been a duty free shop still the situation would not have been different - thus, the goods supplied are never cleared for home consumption and the warehoused goods are exported by the Duty Free Shop, therefore the levy Customs duty and of the IGST do not arise. The sale of goods at these outlets at the International departure terminals is an export of goods under Customs Act. The respondent can very well claimed to be an exporter under Section 2(20) of the Customs Act, 1962 since it is the respondent who is the seller and is selling the goods in the SHA at the International departure terminal to the international passengers going abroad. These goods are ultimately taken outside India by those passengers. In this way the passengers can be termed as carrier only and not the exporter of those goods. The exporter is the respondent. Therefore the issue of unjust enrichment will not arise here. The goods sold by the respondent-assessee at its outlets situated at the Security Hold Area at the departure terminal of Mumbai International Airport, are exports and the respondent is an exporter and the respondent-assessee is therefore eligible for rebate under N/N. 41/2012, dated 29.6.2012. Appeal dismissed - decided against Revenue.

Issues Involved:
1. Eligibility of Service Tax rebate on rent paid for outlets at Mumbai International Airport.
2. Classification of sales at airport outlets as "exports."
3. Nexus between input service of renting space and claimed export goods.
4. Applicability of the principle of unjust enrichment.
5. Adherence to previous Tribunal decisions and judicial discipline.
6. Applicability of the litigation policy dated 22.08.2019.

Issue-wise Detailed Analysis:

1. Eligibility of Service Tax rebate on rent paid for outlets at Mumbai International Airport:
The primary issue is whether the Service Tax borne by the respondent-assessee on the rent paid to Mumbai International Airport Ltd. (MIAL) for its two outlets at the departure terminal is eligible for rebate under Notification No. 41/2012-ST, dated 29.6.2012. The respondent operates shops at the departure terminal, selling duty/tax paid goods to outgoing international passengers. The Adjudicating Authority sanctioned the refund claims, which was upheld by the Commissioner (Appeals), leading to the Revenue's challenge.

2. Classification of sales at airport outlets as "exports":
The respondent-assessee argued that sales at their outlets in the Security Hold Area (SHA) should be considered as "exports" since the goods sold there are taken out of India by international passengers. The Tribunal referenced the Allahabad High Court's decision in Atin Krishna vs. UOI, which held that goods sold at Duty Free Shops (DFS) to international passengers are exported goods. The Tribunal concluded that sales at the respondent's outlets in SHA are exports under the Customs Act, 1962, and the respondent is an exporter.

3. Nexus between input service of renting space and claimed export goods:
The Tribunal found that the input service of renting space at the airport has a direct nexus with the sale of goods claimed as exports. The goods sold at these outlets are bound to be taken out of India, thereby supporting the respondent's claim for rebate under Notification No. 41/2012-ST.

4. Applicability of the principle of unjust enrichment:
The Tribunal dismissed the Revenue's argument on unjust enrichment, citing that in export transactions, as per clause (a) of proviso to Section 11B(2) of the Central Excise Act, 1944, the question of unjust enrichment does not arise. The goods sold at the respondent's outlets are exported, and no service tax or excise duty is charged or recovered in the export invoice.

5. Adherence to previous Tribunal decisions and judicial discipline:
The Tribunal noted that in previous cases involving the same parties and identical issues, it had ruled in favor of the respondent-assessee, affirming their eligibility for rebate under Notification No. 41/2012-ST. The Tribunal emphasized the importance of judicial discipline and consistency in following its earlier decisions, which were not contested by the Revenue.

6. Applicability of the litigation policy dated 22.08.2019:
The Tribunal highlighted the Ministry of Finance's litigation policy dated 22.08.2019, which sets a threshold financial limit of ?50 lakhs for filing appeals before the Tribunal. Since the amounts involved in the present appeals were below this threshold, the appeals were technically not maintainable. However, the Tribunal proceeded to decide the appeals on merits to avoid any debate on the applicability of the policy to pending cases.

Conclusion:
The Tribunal concluded that the goods sold by the respondent-assessee at its outlets in the SHA at the departure terminal of Mumbai International Airport are exports, and the respondent is an exporter eligible for rebate under Notification No. 41/2012-ST. The appeals filed by the Revenue were dismissed as devoid of merit.

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