2020 (10) TMI 847 - Commissioner - GST

Demand of Tax and Penalty - whether the Driver of the vehicle in movement was having the valid document at the time of interception or otherwise? HELD THAT - As per Rule 138A- (1) The person in-charge of a conveyance shall carry- (a) the invoice or bill of supply or delivery challan, as the case may be; and (b) a copy of e-way bill in physical form or the e-way bill number in electronic form or mapped to a Radio Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the Commissioner. In the instant case,the E-way Bill No.731103481404 was generated on 14.11.2019 by M/s Pratap and Sons, A264, Madri Industrial Area, Udaipur-313003 was meant for delivery to M/s Shri Nath Steel, Near Annapurna Nagar, Opp. Bheru Ji Mandir, Jaitaran Pali. Instead, the impugned goods were intercepted in front of the factory premises of the appellant i.e. M/s Mahesh Iron and Steel Re-rolling Mills, RIICO Industrial Area, Beawar Road, Ajmer (Raj) which is completely off route and also without any valid/legal documents and thus violated the provisions of CGST Act and Rules, 2017. The driver of the goods stated that goods were to be off loaded after contacting at mobile No.9782703374. I do not agree with the contention of the appellant that there was subsequent transit sale. I find that if there was subsequent transit sale in movement of goods to Beawar, Ajmer as all parties must have entered into an agreement for transit sale' and execution must be according to agreement. Moreover, a subsequent invoice/E way Bill should have been generated in favour of the appellant for transit sale before interception. But in the instant case there is neither agreement between appellant and other suppliers of goods nor any subsequent invoice/E way Bill are generated before interception. Therefore, it is clearly an afterthought and also in the eyes of law it is not subsequent 'transit sale'. The case laws relied upon by the appellant in their support is squarely not applicable in the instant case. It is absolute clear that the impugned goods in question were not accompanied with any valid documents during the course of interception and the contention of the appellant is an afterthought and not acceptable at this stage - Appeal dismissed.

Summary

Issues Involved:
1. Validity of the tax and penalty imposed by the Assistant Commissioner, CGST.
2. Legitimacy of the interception and detention of goods.
3. Compliance with E-way Bill requirements.
4. Claim of subsequent "sale in transit."
5. Applicability of cited case laws.

Issue-wise Detailed Analysis:

1. Validity of the tax and penalty imposed by the Assistant Commissioner, CGST:
The appellant contested the tax and penalty imposed by the Assistant Commissioner, CGST, arguing that the order was erroneous and did not consider the full facts and circumstances of the case. The appellant claimed that there was no tax evasion, as all transactions were between registered dealers, and there was no basis for double taxation. The adjudicating authority, however, confirmed the CGST and SGST amounts along with equal penalties, citing non-compliance with the CGST Act and Rules.

2. Legitimacy of the interception and detention of goods:
The goods were intercepted outside M/s Mahesh Iron and Steel Re-rolling Mills, which was off-route from the intended delivery address mentioned in the E-way Bill. The adjudicating authority detained the goods under Section 129(1) of the CGST Act, 2017, due to discrepancies in the documentation. The appellant’s defense was that the goods were in transit due to a subsequent sale, but this was not accepted by the adjudicating authority.

3. Compliance with E-way Bill requirements:
The adjudicating authority found that the goods were not accompanied by a valid E-way Bill at the time of interception. The original E-way Bill was meant for delivery to a different address, and no valid E-way Bill was available for the appellant’s address. The appellant generated a second E-way Bill after the interception, which the adjudicating authority deemed as an afterthought and not in compliance with the rules.

4. Claim of subsequent "sale in transit":
The appellant argued that there was a subsequent sale in transit, moving the goods from Jaitaran to Ajmer. However, the adjudicating authority rejected this claim, stating that there was no agreement for a transit sale, and no subsequent invoice or E-way Bill was generated before the interception. The adjudicating authority concluded that the claim of a subsequent sale was an afterthought and not legally valid.

5. Applicability of cited case laws:
The appellant cited several case laws in their defense, including judgments from the Kerala High Court, Gujarat High Court, Allahabad High Court, and Rajasthan High Court. However, the adjudicating authority found these case laws not applicable to the current case, as the facts and circumstances differed significantly. The adjudicating authority emphasized that the appellant’s situation did not align with the principles established in the cited cases.

Conclusion:
The adjudicating authority upheld the tax and penalty imposed, rejecting the appellant’s claims of a subsequent sale in transit and the applicability of cited case laws. The authority found that the goods were not accompanied by valid documents at the time of interception, and the appellant’s contentions were deemed afterthoughts. Consequently, the appeal filed by the appellant was rejected, affirming the original order.