Order Date – 28 February 2023

Parties: M/s Delhi Duty Free Services Pvt. Ltd Vs The Commissioner, Central Tax

Facts –

• The Appellant, M/s Delhi Duty Free Services Pvt. Ltd, is a duty free shop which operate at the departure and arrival terminals of the Airport. Pursuant to the decision of Division Bench of the Tribunal in Commissioner of Services Tax-VII vs. M/s. Flemingo Duty Free Shop Pvt. Ltd, the appellant had filed three refund applications dated 31.01.2018 on the amount of rent and other charges for operating the duty free shops at the departure and arrival terminals of the Airport.
• Of which the refund for the 1st period was allowed by the Tribunal and filed a letter dated 05.09.2019 for the implementation of the same. However, a show cause notice 05.05.2020 was issued rejecting the refund. Refund for the 3rd period was also denied by issuing a show cause notice on the ground that the duty free shops were located in a taxable territory, and refund for the 2nd period was allowed.
• Being aggrieve by both the appellant and the department had filed appeals.

Issue –

• Whether Service tax is leviable on rent and other charges for operating the duty free shops at the departure and arrival terminals of the Airport?

Order –

• The Tribunal observed that the Commissioner (Appeals) was bound by the decision of the Tribunal rendered on 14.08.2019 wherein it had been held that the issue of the limitation would not arise in the present matter as tax had been collected without authority. Thus, under no circumstances the Commissioner (Appeals) could have taken upon himself the task of deciding the issue of limitation or unjust enrichment.
• The Tribunal also relied on the decision of Supreme Court in the case of The Bhopal Sugar Industries Ltd. vs. The Income-Tax Officer, Bhopal and where it was held that it would result in chaos in the administration of justice if a subordinate Tribunal refuses to carry out directions given to it by a superior Tribunal. In fact, this would be destructive of one of the basic principles of administration of justice.
• Hence the appellant is entitled to the refund for the three period with applicable interest under section 11BB of the Excise Act.