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TMI Blog2021 (6) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant have contravened the provisions of Sections 22 (read with Rule 11 of CGST Rules, 2017), 35, 37, 38 39 of the CGST Act, 2017 by storing dutiable goods illegally at an unregistered premise, without any authority of law and also by wrongly accounting for seized goods in their books of account and also not shown the same properly in periodical returns filed by them with the sole intent to evade payment of CGST/SGST. Therefore, the impugned goods i.e. Angle, Channel, Shape, Section, Beam, MS Bar, Flat, Gate Channel, MS Pipe etc., valued at ₹ 5,53,10,466/- stored at the godown of M/s. Taj Iron Store, seized vide GST INS-02 under Panchnama dated 13-9-2018 under Section 67(2) of the CGST Act, 2017 were liable for confiscation under Section 130 of the CGST Act, 2017 read with Rule 139 of the CGST Rules, 2017 and M/s. Taj Iron Store is also liable for penalty under Section 122(1)(xvi) and 122(1)(xviii) of the CGST Act, 2017 and also under Section 125 of CGST Act, 2017. Penalty on Shri Mohd. Riyaz Khan, Proprietor of M/s. Taj Iron Store who was looking after the day to day affairs of the Firm - HELD THAT:- He has abetted and assisted in activities of storing dutiable goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... godown situated at S.P. 636, A3, Road No. 6, V.K.I. Area, Jaipur. 2.4 Accordingly, on the same day i.e. 13-9-2018 officers, alongwith panchas and Shri Mohammed Riyaz Khan, Proprietor, M/s. Taj Iron Store went to the godown situated at S.P. 636, A3, Road No. 6, V.K.I. Area, Jaipur for further proceedings. During the course of proceedings, a GST Registration Certificate No. 08ACWPK9035H1ZO of Mohammed Riyaz Khan, Proprietor, M/s. Taj Iron Store was obtained which was showing their principal place of business at 25 Dudu Bagh, Loha Mandi, S.C. Road Jaipur-302001 and no other additional place of business in the state. On being asked Shri Mohammed Riyaz Khan informed that they had applied for registration of additional place of business for this godown but they could not produce any documentary evidence in support of such claim. 2.5 Further, during the proceedings at S.P. 636, A3, Road No. 6, V.K.I. Area, Jaipur, physical stock verification of goods was carried out by the officers in presence of independent Panch witnesses and Shri Mohammed Riyaz Khan and found the stock position as under : S. No. Description of goods Quantity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d invoices on which address of godown premise has been printed; that they have tried to upload amendments but could not do so due to some technical issues; that there was no mala fide intention of the assessee at any stage; that they have now added the godown premise as their additional place of business by amending their registration certificate and therefore, seized goods may be released, provisionally. 2.9 Subsequently, the impugned goods were provisionally released by the Additional Commissioner, Central Goods and Services Tax and Central Excise Commissionerate, Jaipur vide Provisional Release Order dated 20-9-2018, issued from File No. IV(6)207/AE/JPR/2018 against fulfilling the conditions as the stipulated in the said order. 2.10 Further, Shri Mohammed Riyaz Khan, Proprietor of M/s. Taj Iron Store sent a letter dated 24-9-2018 informing about retraction from the submissions made by him during recording of his statement dated 18-9-2018 by alleging that his statement was recorded under duress and he was forcibly made to sign the said statement. 2.11 Accordingly, a summons was issued to Shri Mohammed Riyaz Khan by the Deputy Director, DGGI, JZU, Jaipur asking him to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also by wrongly accounting for seized goods in their books of account and also not shown the same properly in periodical returns filed by them with the sole intent to evade payment of applicable GST, therefore, the said seized goods as detailed in GST INS 02 to Panchnama dated 13-9-2018, drawn at the premise of M/s. Taj Iron Store and which were lying at plot No. S.P 636, A3, Road No. 6, V.KI. Area, Jaipur and totally valued at ₹ 5,53,10,446/- were appeared to be liable for confiscation under Section 130 of the CGST Act, 2017 read with Rule 139 of the GST Rules, 2017. M/s. Taj Iron Store have thus appeared rendered themselves liable to penalty under Section 122(l)(xvi), Section 122(1)(xviii) and Section 125 of the CGST Act, 2017. 2.17 Shri Mohammed Riyaz Khan, Proprietor of M/s. Taj Iron Store, who was also looking after the day-to-day affairs of the firm, appeared to have consciously and deliberately indulged in such activity of storing dutiable goods at unregistered premise, without any authority. He was responsible for the affairs of the firm as he personally supervised the day-to-day activities. He appeared to have abetted and assisted the said act by acquiring posse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Five Thousand only) under Section 125 or the CGST Act, 2017 upon M/s. Taj Iron Store, 25, Dagh, Near Mayank Cinema, Loha Mandi, Sansar Chandra Road, Jaipur. (iv) Imposed a Penalty ₹ 25,000/- (Rupees Twenty Five Thousand only) in terms of Section 122(3)(a) of the CGST Act, 2017 upon Shri Mohammed Riyaz Khan, Proprietor of M/s. Taj Iron Store. (v) Also imposed a Penalty ₹ 25,000/- (Rupees Twenty Five Thousand only) under Section 125 of the CGST Act, 2017 upon Shri Mohammed Riyaz Khan, Proprietor of M/s. Taj Iron Store. 4. Being aggrieved with the impugned Order in Original No. 1- 02/Dem/GST/AC/DIV-C/2020-21, dated 5-5-2020, passed by the Assistant Commissioner, Central Goods and Services Tax Division-C, Jaipur, the appellant has filed the appeal on the following grounds which may be summarized as under :- A. THE ADDITIONAL PLACE OF BUSINESS i.e. GODOWN WAS NOT GOT REGISTERED MERELY FOR BONA FIDE REASONS, ALL OTHER STATUTORY RFCORDS ESTABLISH THAT THE APPELLANT NEVER INTENDED TO EVAD A.1 In the matter, it shall be vital to apprehend that, on 13-9-2018, the Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the applicant as SP 636, Road No. VKI Area. Jaipur and all the invoices have been duly accounted for Had there been any mala fide intent of the appellant, the address of the godown would not have been there at the invoices. The fact affirms the contention of the applicant and it is merely a bona fide mistake. A.2.4 Address at Tax invoices : From the date 1-7-2017, the applicant have been issuing Tax Invoices and paying GST. The address at the Tax Invoices of the applicant appears as SP636 A3, Road No. 6, VKI Area, Jaipur. Had there been any mala fide intent of the appellant, they would not have shown this address on the tax invoice. Thus, the confiscation of stock lying at the godown is not judicious. A.2.5 Endorsement of the godown as additional place of business-Further, it shall be important to discuss that after initiation of the matter by the DGGI, now the appellant has got the premises SP 636 A3, Road No. 6, VKI Area, Jaipur added to our GST registration as an Additional place of business. The copy of the registration and addition of the new premises is enclosed for reference please. A.3 However, the learned Adjudicating Authority did not discuss the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt seized the entire goods without considering any plea of the appellant and this action of the department caused heavy financial losses to the appellant. Further, the adjudicating authority also ignored all the evidences submitted by the appellant and confirmed the allegations. This unjustifiable approach in deciding the matter and ignoring the plight of the appellant has extended huge losses to the appellant. B.3 From, the above it is explicitly clear that at the time of search the officers of DGGI could not point out any out any difference of stock. The appellant put forth the facts before the officers of DGGI at the time of search, that owing to lack of knowledge they could not got their godown endorsed at GST portal as additional place of business . But they did not acknowledge the fact, which was verifiable on the spot. The plight of the appellant totally ignored by the adjudicating authority as well as, despite the fact that the appellant submitted various evidences in support of their contention. B.4 At para 28.9 of the impugned Order in Original the Learned Adjudicating, authority very unjustifiably held that, I further find that all goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e escaped payment of tax or has kept his accounts or goods in such manner as is likely to cause evasion of tax payable under this Act, he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place. (2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to an proceedings under this Act, are secreted in any place he may authorize in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things : Provided that where it is not practicable to seize any such goods, the proper officer, or an officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in FORM GSTINS-02. C.2 As per language of the Section 67(2) of the Act ibid, it is construed that the provisions stipulates that search can be carried out under Section 67(1) of the Act, if there is reason to believe that a taxable person has - (a) suppressed the stock of goods in hand, or (b) suppressed the stock of goods in hand, or (c) claimed input tax credit in excess of his entitlement under this Act, or (d) indulged in contravention of the provisions of this Act or the rules mode thereunder to evade tax under this Act or (e) an owner of a godown or any other place is keeping goods which have escaped payment of tax or; I kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act. None of the reasons as discussed above were there for processing search of premises. Neither there was any suppression, nor excess availment of credit nor any intent to evade tax, nor any intent to escape tax and nor any such documentation to evade tax. Further, after search proceedings carried out under Section 67(1), the goods can be seized Section 67(2) if there is reason to believ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and wrongly confirmed the allegations made against the appellant in the Show Cause Notice. Thus, the impugned Oder in Original deserves to be set aside on this score as well. D. PANCHNAMA PROCEEDINGS DATED 13-9-2018 ARE UN-LAWFUL ON VARIOUS SCORES : D.1 Search Panchnama in legal matters remains the main document and it leads to achieve the motto of justice. But in the present case the whole panchnama dated 13-9-2018 is based on illegal/baseless premises and misinterpretation of the evidences to hold the appellants unlawfully liable to pay huge Fine Penalty which is not due on them. The meticulous study of the panchnama other evidences will overtly establish that how the things were manipulated during the investigations and the innocent tax payers i.e. appellants were subjugated to accept all the written proceedings verbatim without offering any opportunity to raise their voice. In the succeeding paragraphs, it has been demonstrably endeavoured to bring to light the misleading specifics of the panchnama which will categorically prove the innocence of the appellants. D.2 Panchnama proceedings dated 13-9-2018 at business premises of M/s. Taj Iron Store at 25, Dudu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the premises. D.2.2.1 However, the adjudicating authority has wrongly twisted this plea of the appellant while deciding the case. In the SCN the relied upon documents have been mentioned which are copies of Panchnama, Statements and correspondence made by the appellant with department, after the search proceedings. However, the appellant had contested that a huge amount of documents were resumed from the premises of the appellant, which have not been relied upon in the SCN. which is indicative of the fact that the appellant had not any intent to evade the tax. The Learned Adjudicating Authority wrongly ignored this contention of the appellant and unjustifiable confirmed the allegations. D.2.3 The Officers who left the premises during the panchnama proceedings did not offer their personal search when they left the premise during search: As per Section 100 of Cr.PC., after the completion of search proceedings the team of officers conducting the search and the accompanying witnesses should offer themselves for their personal search to the person in-charge of the premises being searched. Even if some officer is leaving the premises during the search proceedings, they sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid to the Government or input tax credit availed of or passed on or distributed irregularly, or the refund claimed fraudulently, whichever is higher. 122.(3) Any person who - (a) aids or abets any of the offences specified in clauses (i) to (xxi) of sub-section (1); (b) acquires possession of or in any way concerns himself in transporting, removing depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with any goods which he knows or has reasons to believe are liable to confiscation under this Act or the rules made thereunder; (c) receives or is any way concerned with the supply of or in any other manner deals with any supply of services which he knows or has reasons to believe are in contravention of any provisions of this Act or the rules made thereunder; (d) fails to appear before the officer of central tax, when issued with a summon for appearance to give evidence or produce a document in an inquiry ; 125. Any person, who contravenes any of the provisions of this Act or a rules made thereunder for which no penalty is separately provided tor in this Act shall be liable to penalty which may extend to twenty-fiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NG THE CASE. I. REDEMPTION FINE CANNOT BE IMPOSED IF THERE IS MERELY PROCEDURAL LAPSE : The appellant relies on the following cases in their support : Commissioner of Central Excise, Chandigarh v. Pepsi Foods Ltd. reported at 2010 (260) E.L.T. 481 (S.C.), Commissioner of Sales Tax, UP v. Sanjiv Fabrics reported at 2010 (258) E.LT. 465 (S.C.) Vinod Kumar Gupta v. CCE [2012-TIOL-324-HC-P H-CX] = 2013 (287) E.L.T. 54 (P H) South Central Railway Employees Co-operative Credit Society Employees Union v. B. Yashodabai and others [(2015) 2 SCC 727)] Union of India v. Topland Engines Pvt. Ltd. - 2010 (253) E.L.T. A17 (S.C.) IDL Industries Ltd. v. Commissioner of Central Excise Customs reported at 2016 (337) E.L.T. 496 (S.C.) Commissioner v. Jain Vanguard Polybutlene Ltd. - 2015 (326) E.L.T. A86 (S.C.) Commissioner v. Jain Vanguard Polybutlene Ltd. reported at 2010 (256) E.L.T. 523 (Bom.) Kamakshi Tradexim (India) Pvt. Ltd. v. Union of India - 2017 (351) E.L.T. 102 (Guj.) Mycon Construction Ltd. v. Union of India - 2017 (350) E. L.T. 514 (Bom.) Padmavati Tubes v. Commissioner of Central Excise Services Tax, Vapi - 2017 (351) E.L.T. 38 (Guj.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Also given an option to pay, a fine of ₹ 99,55,880/- in lieu of confiscation under Section 130(2) of CGST Act, 20l7 corresponding SGST Act and imposed a penalty amounting to ₹ 99,55,880/- in terms of Section 122(1)(xvi) and (xviii) of the CGST Act, 2017 corresponding SGST Act on the appellant i.e. M/s. Taj Iron Store, Jaipur, and a Penalty of ₹ 25,000/- under Section 125 of the CGST Act, 2017 on the appellant. Also imposed a penalty of ₹ 25,000/- under Section 122 and penalty of ₹ 25,000/- under Section 125 of the CGST Act, 2017 on Shri Mohd. Riyaz Khan, Proprietor, of M/s. Taj Iron Store, Jaipur. Relevant provisions of the CGST Act and Rules are as under :- 7. As per Section 22(1) of the CGST Act, 2017 :- Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees : Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er than a person referred to in Section 14 of the Integrated Goods and Services Tax Act, 2017 or an Input Service Distributor or a non-resident taxable person or a person paying tax under Section 10 or Section 51 or, as the case may be, under Section 52 shall furnish a return specified under sub-section (1) of Section 39 in FORM GSTR-3 electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner. 12. I find that appellant has contended that they themselves informed about the said godown situated at S.P. 636, A3 Road No. 6. V.K.I Area. Jaipur, where the impugned goods have been seized; that the assessee maintain regular books of account and he entered all its purchases and sales in their books of account; that the said premise was taken on rent from M/s. Taj Industries and the rent of the same was paid through cheque/NEFT; that the assessee issued invoices on which address of godown premise has been printed; that they have tried to upload amendments but could not do so due to some technical issues; that there was no mala fide intention at any stage; that they have added the godown premise as their additional place of busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e confirmed that there was no pressure on him during recording of his statement. Thus, the panchnama proceedings and statements recording were not in any manner unlawful which the appellant claim in the instant matter, is not acceptable at this stage and now it is an after thought. Moreover, he appended his signatures in order to accept the proceedings recorded in the panchnama, Further, I find that procedure of verification of stock taken by the officers of DGGI, Jaipur was never remained in dispute in the instant matter. When panchnama was drawn in the presence of independent panchas and in the presence of Shri Mohd. Riyaz Khan, Proprietor of M/s. Taj Iron Store and same was duly signed by him, no fault can be find in the procedure of drawal of panchnama proceedings. 14. From the above, it is clear that M/s. Taj Iron Store, 25, Dudu Bagh. Loha Mandi, S.C. Road, Jaipur intentionally did not declare the additional place of business i.e. godown situated at S.P. 636, A3 Road No. 6, V.K.I Area, Jaipur in their GST Registration and carried out the business activities from the unregistered place. Further, the appellant could not produce any corroborative evidence in support of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedural lapse on his part, cannot be accepted at this stage, as there is no such relaxation under the provisions of CGST Act/Rules. Every assessee who deals in taxable supplies has to follow the provisions as prescribed under CGST Act/Rules, but he has failed to do so. Thus, he has abetted and assisted in activities of storing dutiable goods at unregistered premise, without any authority of law and dealing in impugned goods which he knew were liable to confiscation and rendered himself liable to penalty under Section 122(3) and Section 125 of the CGST Act, 2017. 16. The appellants have cited the various case laws in their defence which are squarely not applicable in the present case as the facts of those cases are different from the present case. 17. In view of the discussion and findings above and as per legal provisions, I find that the appellants were required to comply the provisions of law and to follow the procedure as prescribed under CGST Act/Rules but the appellants have completely failed to do so. Therefore, the goods seized at godown were liable for confiscation under Section 130 of the CGST Act, 2017 and the appellants were also liable for penal action under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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