2021 (2) TMI 552 - Commissioner - GST

Confiscation of goods alongwith the vehicle - Valid E-way bill was not available with the conveyance at the time of interception - Vehicle number not updated in the E-way Bill - HELD THAT - M/s. Prerna Export, Shivaji Nagar, Madanganj, Kishangarh, Rajasthan has imported the goods ABRASIVES from China. During the course of verification of vehicle No. RJ14-GE-4146 by the officers of CGST Division, B, Jaipur the E-way Bill Number 721075239264, dated 4-6-2019 of Part-A of E-way Bill was having the shipping address Shivaji Nagar, Madanganj, Kishangarh, Rajasthan-305801 whereas, in Part-B of E-Way Bill the vehicle Number was shown different as RJ-19-GF-0560. Thus it is clear that the E-way Bill found during verification was not valid/proper for movement of vehicle. The appellant has contended that when the goods reached to Jaipur, the goods were being carried in another Vehicle Number RJ 14 GE 4146 to their office at Bani Park, Jaipur from the location of the local transporter, which is the distance upto 50 kilometers. But it is found that in the E-way Bill the address, has been shown as Shivaji Nagar, Madanganj Kishangarh, Rajasthan. The distance of Kishangarh is more than 50 Kilometer from Jaipur. As per Rule 138(5) of CGST Rules, 2017 - Where the goods are transferred from one conveyance to another, the consignor or the recipient, who has provided information in Part-A of the FORM GST EWB-01, or the transporter shall, before such transfer and further movement of goods, update the details of conveyance in the E-way Bill on the common portal in Part-B of FORM GST EWB-01. Further, as per Notification 12/2018-C.T., dated 7-3-2018 while transporting the goods from the place of transporter to the place of the consignee for more than 50 kilometer the part-B of E-way Bill has to be updated with the actual vehicle number. But the appellant has failed to do so. It is also found that in fact, the goods were found loaded in vehicle No. RJ 14 GE 4146 whereas, in Part-B of GST EWB-01 the vehicle number was mentioned as RJ 19 GF 0560. Therefore the driver of the vehicle was not carrying a valid E-way Bill at the time of interception of the vehicle. Thus, the appellant s contention is not acceptable. The E-way Bill shall not be valid for movement of goods by road unless the information in Part-A and Part-B of FORM GST EWB-01 has been furnished correctly. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Validity of the E-way bill.
2. Imposition of penalty.
3. Principles of natural justice.
4. Technical and venial defects.
5. Applicability of Circular No. 64/38/2018-GST.

Detailed Analysis:

1. Validity of the E-way Bill:
The core issue revolves around the validity of the E-way bill. The conveyance bearing No. RJ14-GE-4146 was intercepted, and it was found that a valid E-way bill was not available at the time of interception. Specifically, the vehicle number was not updated in the E-way bill. According to Rule 138 of the CGST Rules, 2017, every registered person must furnish information relating to the movement of goods exceeding a consignment value of fifty thousand rupees. The appellant failed to update the vehicle number in Part-B of the E-way Bill, which is a mandatory requirement for the validity of the E-way bill during the movement of goods.

2. Imposition of Penalty:
The adjudicating authority imposed a penalty equal to one hundred percent of the tax amounting to ?1,12,488/-. The appellant argued that the discrepancy was technical and did not result in any revenue loss. However, the authority found that the appellant did not carry a valid E-way bill at the time of interception, thus justifying the imposition of the penalty. The discretion to impose a penalty must be exercised judicially, as reiterated in the case of Hindustan Steel Limited v. State of Orissa, where penalties are not to be imposed for technical or venial breaches unless there is a deliberate defiance of law.

3. Principles of Natural Justice:
The appellant contended that the impugned order was passed without proper enquiry and without giving adequate opportunity to present their case, thus violating the principles of natural justice. The adjudicating authority, however, issued a notice and served it on the person-in-charge and the owner of the goods, followed by the issuance of the impugned order. The appellant's claim that the order was passed arbitrarily and without proper hearing was not accepted by the authority, which found that the procedural requirements were met.

4. Technical and Venial Defects:
The appellant argued that the discrepancies were technical and venial in nature, without any deliberate intention to evade tax. The adjudicating authority, however, emphasized that the E-way bill was not valid for the movement of goods as the vehicle number was not updated, which is a critical requirement under Rule 138(5) of the CGST Rules, 2017. The authority rejected the appellant's contention, stating that the E-way bill must be correctly furnished in both Part-A and Part-B for the movement of goods.

5. Applicability of Circular No. 64/38/2018-GST:
The appellant cited Circular No. 64/38/2018-GST, which suggests that for technical errors without deliberate intention to evade tax, the penalty should not exceed ?1,000/-. However, the adjudicating authority did not find this circular applicable in the present case, as the discrepancy was not merely technical but involved a failure to comply with the mandatory requirement of updating the vehicle number in the E-way bill.

Conclusion:
After a thorough examination of the case records and submissions, the adjudicating authority upheld the impugned order, rejecting the appeal. The authority concluded that the appellant failed to carry a valid E-way bill, justifying the imposition of penalty and dismissing the arguments related to technical defects and natural justice violations. The appeal was rejected, and the penalty and tax demand were confirmed.