How does RFID reader reads a passive RFID tag?
The first hit for "passive RFID" search on Google returns this:


  A passive tag is an RFID tag that does not contain a battery; the power is supplied by the reader. When radio waves from the reader are encountered by a passive rfid tag, the coiled antenna within the tag forms a magnetic field. The tag draws power from it, energizing the circuits in the tag. The tag then sends the information encoded in the tag's memory. Source: Technovolgy.com.




Figure 1. A passive RFID tag showing a 6-turn antenna and the chip. Source: SCM Wiki 2012.


  Are the passports using passive tags? I cannot sense a sort of battery on a passport tag.


Some countries have added RFID to their passports. They have no need of a battery as the passport does not need long range detection. (You wouldn't want someone to be able to identify you from a distance.)