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TMI Blog2023 (2) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of petitioner's counsel is taken to be correct that the dealer was new in the business and to survive and establish, he was giving heavy discount, then it cannot be assumed and expected that the value of Pan Masala for 60 Cartoons, as disclosed by the dealer, would be Rs.69,600/- i.e. roughly one-tenth of the value arrived by the detaining authority on the basis of declaration made on the pouch of each Pan Masala. This Court finds that it is a case of grossly undervaluing the 3,84,000 pouches of Pan Masala being sent by the dealer disclosing its price as Rs.69,600/-. The only conclusion, which can be drawn is that to avoid downloading E-Way bill and brining the transaction on record that the goods were undervalued to such an extent. Moreover, the Taxing Authorities have also found that one of the consignee situated at Jharkhand was actually registered with the Taxing Authorities disclosing his nature of business as Works Contract and Suppliers of Services and not in the business of trading. These actions of the dealer lead to the only conclusion that the transactions being not recorded with the Revenue so as to escape payment of due tax in the garb that E-Way bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shyam Freight Carrier along with Bilties. 4. The goods in transit from State of Haryana to Jharkhand were intercepted by mobile squad, respondent No.5 on 04.02.2019 near Sharkara Sansthan, Kanpur. The driver of the vehicle produced goods receipt No.413 and 414 and tax invoices No.RF18-19/10 and RF 18- 19/11. During vehicle verification conducted on 05.02.2019, it was found that the vehicle was transporting 120 Cartoons of Pan Masala and tobacco in place of 60 Cartoons as was evident from tax invoices produced by the driver. The goods were not carrying E-Way Bill in view of Rule 138 as the value of goods were claimed to be below Rs.50,000/-. The Mobile Squad, on inspection, found that in each cartoons there were 200 boxes and in each boxes, 32 pouches were kept and on every pouch, MRP Rs.4/- was printed. The total value of 60 Cartoons came to Rs.15,36,000/- and after allowing discount of 25% and excluding tax and Cess, the basic value came to Rs.6,12,766 while the value on both the invoices was declared collectively Rs.69,600/-. 5. On 06.02.2019, a show cause notice in Form MOV 07 was issued. A detailed reply was filed on 13.02.2019 wherein it was mentioned that tax invoices i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant case, as the goods of Pan Masala and Tobacco, which were sent to two different consignees, were less than Rs.50,000/-, no necessity arose to download them. 10. He then contended that as the dealer had started his business only in the year 2018 and to compete in the Pan Masala segment, he was offering huge discount and the price disclosed in the Tax Invoices cannot be disbelieved looking to the competitiveness in the business. 11. Per contra, learned Standing Counsel submitted that in order to avoid E-Way bill and production and the sale being uploaded on the web-portal, the goods were deliberately undervalued by the petitioner. According to him, during transit, the driver of the vehicle was only carrying with him two tax invoices and bility for Pan Masala but no tax invoices for Tobacco was with him. The tax invoices were later on produced along with explanation furnished by the dealer. He then submitted that the price of one Cartoon, calculated on the basis of MRP of Rs.4/- per Pan Masala and after giving trade discounts of 25%, was fixed at Rs.10,240/- while the tax invoices reflect price of one Cartoon at Rs.1,160/-. This according to him was done so that after giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and M/s Alliance Trading Company were in 120 Cartoons. 30 Cartoons each of Pan Masala was sent to the two dealers while 60 Cartoons of Tobacco was sent to the two dealers. During interception of goods, the tax invoices produced was only for Pan Masala and not for Tobacco. During the verification of goods, it was found that value of each pouch of Pan Masala was Rs.4/- and each Cartoon contained 200 boxes and 1 box contain 32 pouches. On the total calculation done for each Cartoons, the value came to Rs.10,240/- after giving 25% discount. The disclosure by the dealer per Cartoon was only Rs.1,160/- and thus after giving trade discount and addition of taxes, the value was brought down to the threshold limit of Rs.50,000/-. 18. The Taxing Authorities, on fair valuation, found that the goods, which were in transit both Pan Masala and Tobacco accounted for Rs.7,12,766/- while the proper disclosure was not made by the dealer. It was on this undervaluation of goods that the authorities proceeded and imposed IGST and penalty. 19. The very purpose of downloading E-Way bill is that every goods, which are in transit, is recorded in the Web Portal and the Government has a clear picture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected that the value of Pan Masala for 60 Cartoons, as disclosed by the dealer, would be Rs.69,600/- i.e. roughly one-tenth of the value arrived by the detaining authority on the basis of declaration made on the pouch of each Pan Masala. 25. This Court finds that it is a case of grossly undervaluing the 3,84,000 pouches of Pan Masala being sent by the dealer disclosing its price as Rs.69,600/-. The only conclusion, which can be drawn is that to avoid downloading E-Way bill and brining the transaction on record that the goods were undervalued to such an extent. 26. Moreover, the Taxing Authorities have also found that one of the consignee situated at Jharkhand was actually registered with the Taxing Authorities disclosing his nature of business as Works Contract and Suppliers of Services and not in the business of trading. These actions of the dealer lead to the only conclusion that the transactions being not recorded with the Revenue so as to escape payment of due tax in the garb that E-Way bill is only required in case value of goods is more than Rs.50,000/-. 27. Thus, from the above, it can be safely said that the action of the State Authorities in detaining the good ..... 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