Commissioner of CGST and Central Excise Mumbai East Vs Flemingo Travel Retail Lt (Supreme Court of India)
In a noteworthy legal development, the Hon’ble Supreme Court has revisited the issue of VAT exemption on duty free shops located at the arrival and departure terminals of international airports. The case, Commissioner of CGST and Central Excise Mumbai East v. M/s. Flemingo Travel Retail Ltd [Review Petition (Civil) No. 1017 of 2023, dated August 18, 2023], marks a significant turning point as the Supreme Court allowed the review petition to recall its previous judgment dated April 10, 2023. This reversal paves the way for further consideration of the matter in light of substantial legal grounds presented by the Union Government.
The Hon’ble Supreme Court allowed the review petition by recalling the judgement dated April 10, 2023 wherein the Hon’ble Supreme court held that Duty Free Shops at arrival or departure terminals of Airports are outside the customs frontiers of India and tagged the matter with the appeals mentioned in the signed order.
Facts:
M/s. Flemingo Travel Retail Ltd. (“the Respondent”) has duty free shops at the arrival and departure terminals at the international airports at Mumbai and Delhi.
The Respondent filed an application before the Revenue Department (“the Petitioner”) claiming a refund of service tax paid in respect of the charges levied by Mumbai International Airport for the period October 01, 2011 to June 30, 2017 in pursuance of a notification no. 41/2012-ST dated June 29, 2012.
However, the Adjudicating Authority vide an order dated July 05, 2019 (“the Order”) rejected the refund claimed on the ground that the payment of service tax on renting of immovable property of the duty free shops was not liable to be refunded in terms of the provisions of the Finance Act, 1994 (“the Finance Act”).
Aggrieved by the Order the Respondent filed an appeal before CESTAT Mumbai, who vide order dated February 10, 2022 (“the Impugned Order”) allowed the claim of refund of service tax in relation aforesaid transaction.
Aggrieved by the Impugned Order the Respondent filed SLP before the Hon’ble Supreme Court.
The Hon’ble Supreme Court vide judgement dated April 10, 2023 dismissed the SLP and held that duty free shops situated in the arrival or departure terminals of Airports are outside the customs frontiers of India and therefore, they cannot be saddled with any indirect taxes like the service tax.
Now, the Revenue Department filed a review petition against the judgement April 10, 2023.
Held:
The Hon’ble Supreme Court Review Petition (Civil) No. 1017 of 2023 in held as under:
