Legal principle

Sale of goods by an airport outlet in the Security Hold Area of the international departure terminal to outgoing international passengers is an export under the Customs Act, 1962 — the seller is the 'exporter' under Section 2(20), the passenger is only the carrier, and the passenger's invoice is deemed a shipping bill for export under Section 69.

Court decision

The Tribunal dismissed all four Revenue appeals, holding that the goods sold by the respondent at its SHA outlets in the international departure terminal are exports, that the respondent is an 'exporter' under Section 2(20) of the Customs Act, 1962, and that the respondent is accordingly eligible for rebate under Notification No. 41/2012-ST dated 29.6.2012 (Final Order No. A/86904-86907/2019 dated 24.10.2019).

Facts

The respondent, Flemingo Airport Retail Pvt Ltd, operated two shops on rent from MIAL in the Security Hold Area (SHA) of Mumbai airport's international departure terminal, where it sold duty/tax-paid goods (tobacco products, travel accessories, books, magazines) procured from the domestic market to outgoing international passengers who were bound to take them out of India. It claimed rebate of the service tax borne on rent paid to MIAL as an input service, treating these sales as exports, under Notification No. 41/2012-ST dated 29.6.2012 for four quarterly periods of 2015, each claim being roughly Rs. 10.78 lakh to Rs. 12.31 lakh. The Adjudicating Authority sanctioned the refunds in four Orders-in-Original; on Revenue's appeals, the Commissioner (Appeals) upheld the sanctions relying on the Tribunal's earlier decisions in the assessee's own case. Revenue then filed four appeals before the CESTAT, Mumbai.

Key provisions

• Section 69, Customs Act, 1962 — Clearance of warehoused goods for export
• Section 58A, Customs Act, 1962 — Licensing of special warehouses
• Section 50, Customs Act, 1962 — Entry of goods for exportation
• Section 68, Customs Act, 1962 — Clearance of warehoused goods for home consumption
• Section 2(20), Customs Act, 1962 — Definitions
• Section 71, Customs Act, 1962 — Goods not to be taken out of warehouse except as provided by this Act
• Section 73A, Customs Act, 1962 — Custody and removal of warehoused goods
• Section 58, Customs Act, 1962 — Licensing of private warehouses
• Section 57, Customs Act, 1962 — Licensing of public warehouses