Export treatment for duty free airport sales upheld, extending the tobacco-control exemption to such transactions.

Sales from duty free shops at international airports were treated as exports because such outlets operate beyond the customs frontiers of India. Applying the statutory definition of export, customs law concepts of exporter and export, and the foreign trade policy, the Court held that the export exemption under the tobacco control statute extended to such sales. It also relied on binding precedent that transactions after immigration clearance are outside India for the relevant legal purpose, and rejected the per incuriam challenge because a High Court cannot declare a Supreme Court decision per incuriam. The challenge to strike down or read down the impugned provisions therefore failed.

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Issues: Whether the restrictions under the tobacco control statute could be applied to duty free shops at international airports and whether the impugned provisions could be struck down or read down on the footing that such sales were not exports.

Analysis: The Court held that sales from duty free shops at international airports are treated as exports and that such shops operate beyond the customs frontiers of India. It relied on the statutory definition of export, the customs law definition of export and exporter, and the foreign trade policy, which permits export-oriented units to operate retail outlets at international airports. The Court also relied on binding precedents holding that transactions at duty free shops beyond immigration clearance are outside India for relevant legal purposes. The challenge to those precedents as per incuriam was rejected because a High Court cannot declare a Supreme Court decision per incuriam. On that basis, the Court concluded that the exemption for export under the tobacco control statute validly applied to duty free shops.

Conclusion: The challenge failed and the impugned provisions were not struck down or read down as sought.

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