Indirect Tax Weekly Flashback for the period 20 October 2024 to 26 October 2024.

Supreme Court – Indirect Tax Weekly Flashback 

BREAKING | Supreme Court Upholds State’s Regulatory Power To Tax Industrial Alcohol

Case Title: State of U.P. & Ors. Versus M/S Lalta Prasad Vaish and sons

The Supreme Court has upheld the State’s Regulatory Power over the production, manufacture and supply of industrial alcohol and can tax industrial Alcohol.  

The bench of 9 Judge Bench of CJI DY Chandrachud, Justice Hrishikesh Roy, Justice Abhay S. Oka, Justice B.V. Nagarathna, Justice J.B. Pardiwala, Justice Manoj Misra, Justice Ujjal Bhuyan, Justice Satish Chandra Sharma And Justice Augustine George Masih has overturned a seven-judge bench verdict and held that states have regulatory power over production, manufacture and supply of industrial alcohol.

Service Tax Not Separately Payable On Interchange Fee, As Service Tax Has Been Paid On Merchant Discount Rate: Supreme Court

Case Title: Commissioner Of Gst And Central Excise Versus M/S Citibank N.A.

The Supreme Court has held that service tax is not separately payable on the interchange fee, as service tax has been paid on the Merchant Discount Rate (MDR).

The bench of Justice Sanjiv Khanna, Justice Sanjay Kumar and Justice R. Mahadevan has observed that the entire data and details are available with the Service Tax Department and could have been easily ascertained before issuance of the show cause notice. Interestingly, the show cause notice proceeds on the basis that, regardless of the service tax paid by the acquiring bank on the full MDR, the issuing bank would be liable to pay service tax on the proportion of its share in the MDR, which is the interchange fee.

Bombay High Court – Indirect Tax Weekly Flashback

‘Sex And Obscenity Are Not Always Synonymous’: Bombay High Court Directs Customs Dept. To Release Seized Artworks Of F N Souza And Akbar Padamsee

Case Title: M/s. B. K. Polimex India Private Limited Versus Union of India

Sex And Obscenity | The Bombay High Court directs customs to release seized artworks of F N Souza and Akbar Padamsee within 2 weeks.

The bench of Justice M.S. Sonak and Justice Jitendra Jain the Customs laws of India do not insist that Michelangelo’s David be fully clothed before he passes through our Customs Borders. An assistant commissioner of customs cannot lightly and without advertising relevant considerations assume the mantle of being a spokesperson for community standards. Just as one swallow does not make a summer, so also one such decision of one such assistant commissioner of customs does not make the law on this subject.

Bombay High Court Quashes 15 Years Old SCN Alleging Clandestine Clearance Of 663 Import Assignments Without Payment Of Customs Duty

Case Title: Paresh H. Mehta Versus The Union of India

The Bombay High Court has quashed the 15 years old SCN (show cause notice) to the Petitioner seeking to impose a penalty under section 112(a) of the Customs Act, 1962, alleging inter alia a classification of clandestine clearance of 663 import assignments without payment of appropriate duty.

The bench of Justice M.S. Sonak and Justice Jitendra Jain has absurd that the show cause notice was issued in 2008, and the alleged transfer to the call book was in 2021. No intimation was given to the Petitioner; therefore, provisions of Section 28(9) of the Customs Act were breached. The department is duty-bound to intimate the party about transferring the matter to the call book. 

Kerala High Court – Indirect Tax Weekly Flashback

Advance Authorisation Scheme | Kerala High Court Directs Company To Drawback Amount Along With Interest And Obtain Receipt From Customs Dept.

Case Title: Shine Flexible Prints And Packs Private Limited V/S Commissioner Of Customs

The Kerala High Court has directed the company to drawback the amount along with interest and obtain receipt from the customs department. The appellant has mistakenly mentioned the shipping bills in the Duty Drawback Scheme, instead of the Advance Authorisation Scheme.

The bench of Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V.M. has observed that if the DGFT is satisfied that the appellant has discharged his export obligation through the exports that took place between 10.05.2019 and 25.09.2019, then he shall, without further delay, issue the export obligation discharge certificate to the appellant.