TaxTMI 
TaxTMI 
2018 (12) TMI 1352
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....d thereunder, the petitioner is entitled to supply goods and services to Duty Free Shops without payment of taxes and similar supplies from all over the world except India are permitted without payment of taxes. 03-The petitioner has stated that petitioner is a manufacturer and exporter of garments in India and he intends to supply goods to Duty Free Operator (DFO), who in turn is selling the goods from Duty Free Shops (DFSs). It has been further contended that Duty Free Operator operating in India imports goods like liquor, tobacco products, souvenirs, eyewear, watches, fashion, chocolates, perfumes, etc. by filing import general manifest and Bill of Entry for warehousing with the customs department without payment of import duty on the first importation subject to certain conditions. The bill of entry clearly indicates the Duty Free Operator as an "importer". The imported goods are warehoused at a bonded warehouse (customs warehouse) and the bill of entry also discloses that the goods imported are for "sale only for Duty Free Shop / Export". 04-It has been further stated that the Duty Free Operator also takes on rent a private bonded warehouse located near the airport as we....
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.... implementation of GST legislation, the duty free operations in India were exempted from payment of Customs Duty, Countervailing Duty (CVD), Special Additional Customs Duty (SACD), Excise Duty, VAT / Sales Tax, OCTROI, etc. The petitioner's contention is that principle for exemption from payment of VAT / Sales Tax by an Indian Duty Free Shop was evolved pursuant to the judgment delivered by the Hon'ble Supreme Court in the case of (Civil Appeal No.2560/2010, decided on 03/02/2012). 09-The petitioner has further stated that the Duty Free Shops at international airports were permitted to retail of attractive products of foreign origin including liquor, tobacco, confectionery, perfumes, cosmetics, souvenirs, eyewear, watches, fashion, chocolates, etc. It has been further contended that in respect of indigenous products manufactured in India, which were subjected to payment of Excise Duty and VAT and Government of India in the year 2013, based upon representations received from industry and in order to promote "Brand India" to the world, issued notifications so as to allow excise duty free sale of goods manufactured in India to international passengers or members of crew arr....
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....the Warehouses or retail outlets of Duty Free Shops was laid down. 13-The petitioner has further stated that in the year 2017 the Central Goods and Services Tax Act, 2017 (CGST) and the Integrated Goods and Services Tax Act, 2017 (IGST) were enacted. The petitioner in the month of June, 2018 keeping in view the notifications issued from time to time by the Central Board of Excise and Customs contacted one of the Duty Free Operators namely "Flemingo Travel Retail Limited", which operates Duty Free Shops at Delhi and Mumbai International Airport and requested that the petitioner being one of the premier exporters of garments in India would like to retail its products at the Duty Free Shops operated by the Flemingo Travel Retail Limited and a meeting took place, however, the petitioner was informed that on account of enactment of GST Act and Rules, there is no clarity on the previous exemptions which were provided on the basis of various exemptions notification issued from time to time. 14-The petitioner has further stated that he was told to pay GST and in those circumstances, he is being deprived his potential business opportunity to sell the goods from Duty Free Shops. The....
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....the petitioner and other identically placed persons. 17-A further ground has been raised stating that sale from Duty Free Shops in the past has helped to maximize non-aeronautical revenues at airports, which ultimately bring down aeronautical tariffs for the passengers and ultimately the Government of India is the biggest gainer as it has and will receive significantly large funds from the supplies made from Duty Free Shops at international airport in India as revenue share. The revenue so generated can be utilized by the Government of India to provide air connectivity to far flung corners of the country where private investment may not be forthcoming due to long gestation periods. 18-It has been stated that on account of enactment of GST, the benefits of earlier circulars / notifications is not available and therefore, an appropriate writ, order or direction be issued granting exemption from payment of CGST / IGST / SGST. It has also been stated that various global brands from all over the world can be sold in Indian Duty Free Shops without payment of any taxes and duties and the products manufactured in India can not be sold at Duty Free Shops without payment of taxes and t....
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....CGST Act has been implemented and an entirely new scheme of statute with various definitions have been introduced to the statute book and in such circumstances, various defining clauses have to be seen and examined in back drop of the present statute, which is in force as on today. It has been further stated that as per Union Budget, 2017, the definition of Indian territory has been extended to 200 nautical miles and in such circumstances also, all such duty free shops fall within the territory of India and the claim of the petitioner deserve to be dismissed. 24-The respondents have also stated that a similar issue was examined by the Authority on Advance Ruling and the same was analyzed in back drop of the judgment passed by the Hon'ble Supreme Court in the case of (Supra) and the respondents have quoted the relevant portion of the Rule and their contention is that by no stretch of imagination the petitioner can be exempted from payment of CGST / IGST / SGST. 25-The respondents have argued before this Court that so far as point of sale is concerned the case goods are being manufactured at Indore, price of the goods is being received at Indore and they are being dispatche....
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.... variations and cognate expressions, means taking out of India to a place outside India. Further, moreover, as per Section 2 (56) of CGST Act, 2017 "India" means the territory of India as referred to in Article 1 of the Constitution, its Territorial Waters, Seabed and Sub-soil underlying such Waters, Continental Shelf, Exclusive Economic Zone (EEZ) or any other Maritime Zone as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 and the air-space above its territory and territorial waters. For the purpose of CGST Act, India extends the Exclusive Economic Zone upto 200 nautical miles from baseline. The location of the DFS, whether within customs frontier or outside, shall be within India as long as it is not beyond EEZ (200 nautical miles). Therefore, DFS cannot be said to be located outside India. Instead, the DFS is located within India. As the supply to a DFS by an Indian supplier is not to 'a place outside India', therefore, such supplies do not qualify as 'Export of Goods' under GST. Consequently, such supplies cannot be made without payment of duty by furnishing a Bond / Letter or Undertakin....
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....entral Sales Tax Act, 1956 made under Article 269 of the Constitution. 35-On the State side, the most important sources of tax revenue were tax on sale and purchase (entry 54 of the State List), excise duty on alcoholic liquors, opium and narcotics (entry 51 of the State List), Taxes on luxuries, entertainments, amusements, betting and gambling (entry 62 of the State List), Octroi or entry tax (entry 52 of the State List) and electricity tax (entry 53 of the State List). CST was also an important source of revenue though the same was levied by the Union. 36-The need arose in respect of imposition of uniform taxation scheme and the unification of Central VAT and State VAT was possible in form of a dual levy under the constitutional scheme. Power of taxation is assigned to either Union or States subject-wise under Schedule-VII of the Constitution. While the Centre is empowered to tax goods upto the production or manufacturing stage, the States have the power to tax goods at distribution stage. The Union can tax services using residuary powers but States could not. Under a unified Goods and Services Tax scheme, both should have power to tax the complete supply chain from prod....
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....law on the recommendations of the Goods and Services Tax Council. It also provides that Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. d)Article 270 has been amended to provide for distribution of goods and services tax collected by the Union between the Union and the States. e)Article 271 has been amended which restricts power of the Parliament to levy surcharge under GST. In effect, surcharge cannot be imposed on goods and services which are subject to tax under Article 246-A. f)Article 279-A has been inserted to provide for the constitution and mandate of GST Council. g)Article 366 has been amended to exclude alcoholic liquor for human consumption from the ambit of GST, and services have been defined. h)Article 368 has been amended to provide for a special procedure which requires the ratification of the Bill by the legislatures of not less than one half of the States in addition to the method of voting provided for amendment of the Constitution. Thus, any modification in GST Council sh....
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....ute has to be strictly construed. In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used (Principles of Statutory Interpretation by Justice G.P. Singh, Tenth Edition, General Principles of Strict Construction). 44-The Hon'ble Supreme Court has enunciated in similar words the principle of interpretation of taxing laws as under:- "Bhagwati, J. stated the principles as follows : "In construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law. If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the Legislature and by considering what was the substance of the matter" [A. V. Fernandez Vs. State of Kerala, AIR 1957 SC 657....
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....s as to imposition of tax on the sale or purchase of goods : (1)No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place- (a)outside the State; or (b)in the course of the import of the goods into, or export of the goods out of, the territory of India. Section 5 and Section 2(ab) of the Central Sales Tax Act, 1956:- 5. When is a sale or purchase of goods said to take place in the course of import or export.- (1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. (3) Notwi....
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....f the Central Goods and Services Tax Act, 2017:- 2(56)."India" means the territory of India as referred to in article 1 of the Constitution, its territorial waters, seabed and sub-soil underlying such waters, continental shelf, exclusive economic zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976, and the air-space above its territory and territorial waters; Sections 2(11), 2(18) and 2(27) of the Customs Act, 1962:- 2(11)."customs area" means the area of a customs station or a warehouse and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities; 2(18)."export", with its grammatical variations and cognate expressions, means taking out of India to a place outside India; 2(27)."India" includes the territorial waters of India; Section 3(1), (2) and (3) of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976:- (1)The sovereignty of India extends and has always extended to the territorial waters of India (hereinafter....
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....he definition as contained under the IGST Act, 2017 a Duty Free Shop situated at the airport cannot be treated as territory out of India. The petitioner is not exporting the goods out of India. He is selling to a supplier, who is within India and the point of sale is also at Indore as the petitioner is receiving price of goods at Indore. 50-The petitioner is a manufacturer and exporter of garments in India and specializes in manufacturing of high quality products for children with customer base in Middle East, South Africa and USA. He intends to supply goods to Duty Free Shops (DFSs) situated in the duty free area at international airports. The petitioner is aggrieved by the fact that the benefit available to him under the erstwhile central excise regime of removing goods from his factory to DFS located in the international airports without payment of duty is not available to him under the GST regime. 51-Vide notification No.19/2013-Central Excise dated 23/05/2013 and notification No.07/2013-Central Excise (NT) dated 23/05/2013, the Central Government had exempted the goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (hereinafter referred to as ind....
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....ate was later withdrawn this Court in para 51 came to the following conclusion - "From the above discussion, it is clear that the petitioners cannot raise plea of estoppel against the Notification dated 7.8.2000 reducing hill development rebate to 0% as there can be no estoppel against the statute." In light of the aforesaid judgment, the concessions / exemptions granted earlier during the pre-GST regime cannot be claimed as a matter of right. 53-In addition, the petitioner in paragraph 7(i) of the petition has prayed this Court to issue a writ of mandamus ordering and directing that any supply of goods and services made by and Indian supplier to the DFSs in India to be treated as export since the DFS are located beyond the customs frontier of India and any transaction that takes place in a DFS is said to have taken place outside India. Further, in para 7(ii) of the petitioner it has been prayed to allow supply of goods and services by an Indian supplier to the DFS without payment of GST as the transaction undertaken at DFS is treated as an export of goods or services. 54-As per Section 2(5) of the Integrated Goods and Services Tax Act, 2017, "export of good....
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....Indore and intent to supply indigenous goods to Duty Free Shops. 58-Respondents have placed reliance upon judgment delivered in the case of reported in . In the aforesaid case, it has been held that binding nature of the decision would come to an end when the law is changed subsequently. Paragraph No.8 of the aforesaid judgment reads as under: "8. Section 11 of the Code of Civil Procedure is only applicable to suits. S. 141 of the Code makes the procedure regarding suits applicable to proceedings. Explanation to Section 141 excludes proceedings under Art. 226 from the purview of the Section. Even then general principles of respondent judicata are applicable to such proceedings also though S. 11 as such is not applicable. Though a decision to inter parties may not be respondent judicata even under general principles which do not take in the rigour of S. 11, the law laid down by the High Court is binding on it. Decisions may be on questions of facts, questions of law or on mixed question of fact and law. If a decision on facts is rendered by applying the relevant provisions of law to the facts the binding nature of the decision on that point will come to an end when the l....
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....gave over- riding effect to Secition14A and Chapter IIIA with the knowledge that Sections 19 and 39 of the Slum Clearance Act contained non-obstante clauses of equal efficacy. Therefore the later enactment must prevail over the former. The same test was mentioned with approval by this Court in Shri Ram Narain's case (Supra) at page 615." In the aforesaid judgment, it has been held that later act would prevail over the former enactment and therefore, as a new enactment has come into existence i.e. Central Goods and Services Tax Act, 2017, the statutory provisions under the Act or 2017 are to be followed. 60-In the case of reported in , it has been held that the judgment is not a precedence on a preposition which it did not decide. Paragraph 8 of the aforesaid judgment reads as under:- "8.Learned counsel for Revenue submitted that if even a weighbridge was excisable, as held in the case of Narne Tulaman Manufacturers Pvt. Ltd. [(1989) 1 SCC 172] so was a mono vertical crystalliser. The only argument on behalf a Narne Tulaman Manufacturers Pvt. Ltd. was that it was liable to excise duty in respect of the indicating system that it manufactured and not the whole weigh....