TaxTMI 
TaxTMI 
2018 (12) TMI 1352
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.... 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 well as certain shops called "Duty Free Shops"....
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....erations 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 arriving from abroad at the Duty Free Shops located in th....
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.... 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 petitioner's grievance is that in absence of exemption notifi....
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....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 therefore, the action of the respondents authorities has severely failed to carry forward its Brand Ind....
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....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 dispatched to Duty Free Shops, which is certainly within the territory of India and the person, who is purchasing the goods fro....
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....(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 Undertaking (LUT) under Rule 96-A of the CST Rules, 2017. Also, he cannot claim refund of unutilized Input Tax Credit (ITC) under Section 54....
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.... 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 production to distribution, and both goods and services. The scheme of the Constitution did not provide for any concurrent taxing powers to the Union ....
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.... 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 shall also require the ratification by the legislatures of one half of the States. i)Entries in List I and List II have been either substituted or omitted to restrict power to tax goods or services specified ....
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....s 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, p. 661]. Shah, J., has formulated the principles thus : "Interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarel....
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....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) Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or or....
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....rritorial 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 referred to as the territorial waters) and to the seabed and sub-soil underlying, and the airspace over, such waters. (2)The limit of the territorial waters is the line every point of which is at a distance of twelve nautical miles from the nearest point of the appropriate baseline. (3)Notwithstanding anything contained in sub-section (2), the Central Government may, whenever it considers necessary so to do having regard to International Law and State practice, alter, by notification i....
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....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 indigenous goods) when brought into DFS located in the arrival halls at the international customs airports from the factories of their manufacture situated in India for sale to passengers or members of crew arriving from abroad, from the whole of the duty of excise leviable thereon. No such exemption notification has been issued under GST till date. 52-In the case of reported in , the apex Court has held that there is no estoppel against law and recipient of a concession has no legally enforceable right against the Go....
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....rt 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 goods" with its grammatical variations and cognate expressions, means taking out of India to a place outside India. Further, as per Section 2(56) of Central Goods and Services Tax Act, 2017 "India" means the territory of India as referred to in Article 1 of the Constitution, its Territorial Waters, Seabed and Sub-oil 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 a....
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....rt. 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 law is changed subsequently. That is because the law as then stood alone was interpreted in relation to the facts. When the law is changed the cause of action itself is changed. Though the former decision which has become final may continue to bind the parties thereto, when the law is changed and thus the cause of action became different, the new law will have to be applied to the facts in the subsequent case even though facts are same because law applicable is different. The Division Bench rendered the decision by defining "place" with reference to the law applica....
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....he 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 weighbridge. The contention that weighbridges were not 'good' within the meaning of the Act was not raised and no evidence in that behalf was brought on record. We cannot assume that weighbridges sand on the same footing as mono vertical crystallisers in that regard and told that because weighbridges were held to be exigible to excise duty so must mono vertical crystalliser. A decision cannot be relied upon in support of a proposition that it did not decide." In light of the aforesaid judgment, the issue involved in the present case has not been decided in the case of M/s. Hotel As....