2020 (3) TMI 1298 - Commissioner - GST

Detention of goods alongwith conveyance - E-way bill got expired - imposition of IGST Tax and penalty - HELD THAT - M/s. Herbalife International India Pvt. Ltd., Punjab is engaged in direct selling of its products through its large network of distributors dispatched the goods to the appellant i.e. M/s. Herbalife International India Pvt. Ltd., Rajasthan C/o. Jayem Warehousing Pvt. Ltd., E-734, Nakulpath, Lal Kothi Scheme, Near Vidhansabha and Jyoti Nagar Police Station, Jaipur-302015, the owner of the goods is a dealer under the provisions of CGST and RGST Act, 2017 having principal place of business at Jaipur and procures the finished goods from its branches/warehouses located in various other States on stock transfer basis and subsequently sells the same within the State of Rajasthan. Neither the appellant nor the transporter have taken the necessary measures or precautions to ensure extension of validity of the E-way bill or generation of an alternate valid one in terms of Rule 138(10) of Central Goods and Services Tax Rules, 2017 and chose to transport the goods on the old E-way bill which was not a valid document. Therefore, appellant s contention that the delivery of the impugned goods was delayed on account of shortage of space at the recipient s warehouse, during which time the E-way bill expired and the e-way bill portal does not allow them raising of multiple e-way bills for same tax invoice is not acceptable - the appellant has taken a plea that the goods were being transferred from the location of the transporter to the recipient s location which was within the distance of 50 kilometers. The appellant could not prove with documentary evidence their stand that the goods were being transferred from the location of the transporter to the recipient s location which was within the distance of 50 kilometers. Therefore, detention/seizure of goods and vehicle and initiation of penal proceedings cannot be faulted - appeal dismissed - decided against appellant.

Summary

Issues:
1. Detention of goods and conveyance due to expired E-way bill.
2. Imposition of IGST tax and penalty.
3. Appellant's grounds for appeal.
4. Legal provisions and case laws cited by the appellant.
5. Decision of the Commissioner (Appeals).

Analysis:
1. Detention of goods and conveyance due to expired E-way bill:
The case involved the interception of a conveyance with an expired E-way bill, leading to the detention of goods and the conveyance under Section 129 of the Central Goods and Services Tax Act, 2017. The appellant contested the detention, claiming the goods were being transferred within a 50 km distance and supported by appropriate documents. However, the Commissioner found that the appellant failed to ensure the E-way bill's validity extension or generation of a new one as per Rule 138(10) of the CGST Rules, 2017. The lack of documentary evidence to prove the goods' transfer within 50 km led to the rejection of the appellant's plea.

2. Imposition of IGST tax and penalty:
Apart from confirming the demand for IGST tax, the adjudicating authority imposed a penalty equal to the tax amount. The appellant argued against the penalty, citing no mala fide intent for tax evasion. However, the Commissioner upheld the penalty, considering the expired E-way bill situation and the failure to comply with legal requirements for valid documentation during goods transportation.

3. Appellant's grounds for appeal:
The appellant raised various grounds for appeal, including the proximity of goods transfer, appropriate documentation, and absence of mala fide intent for tax evasion. Despite presenting case laws to support their contentions, the Commissioner found the appellant's arguments insufficient due to the lack of concrete evidence and non-compliance with E-way bill validity regulations.

4. Legal provisions and case laws cited by the appellant:
The appellant referred to case laws such as Calcutta High Court and Supreme Court judgments to support their appeal grounds. However, the Commissioner's decision was based on the specific provisions of Rule 138(10) of the CGST Rules, 2017, regarding the validity and renewal of E-way bills, emphasizing the importance of compliance with statutory requirements.

5. Decision of the Commissioner (Appeals):
After detailed submissions and a personal hearing, the Commissioner rejected the appeal and upheld the impugned order passed by the adjudicating authority. The decision was based on the failure of the appellant to meet the legal requirements for E-way bill validity and lack of substantial evidence to support their claims of goods transfer within a specified distance. Consequently, the appeal was disposed of in favor of the impugned order, maintaining the imposition of IGST tax and penalty.

This comprehensive analysis outlines the key issues, legal considerations, appellant's arguments, and the final decision of the Commissioner (Appeals) in the case involving the detention of goods and conveyance due to an expired E-way bill.