This appeal has been filed under Section 107 of the Central Goods and Service Tax Act, 2017 by The Assistant Commissioner, CGST, Division-F, Bharatpur (hereinafter also referred to as “the appellant or department” also) in view of Order-in-Review No.84/Review/2020-21 dated 26.06.2020 passed by the Commissioner, Central Goods and Service Tax Commissionerate, Alwar under Section 107(2) of the Central Goods and Service Tax Act, 2017, against the Order in Original No. CGST/AE/DIV-F/EWB-RJ 14 GH 3065/2019/1767-68 dated 30.09.2019 (hereinafter also referred to as “the impugned order”) passed by The Assistant Commissioner, CGST, Division-F, Bharatpur (hereinafter also referred to as “the adjudicating authority”) in the case of M/s Bullet Logistics, Padam Singh Road, Tank Road, Karol Bagh, New Delhi-110 005 (hereinafter referred to as the respondent).

2. Brief Facts of the case:-

2.1 The officers of the CGST Division-F, Bharatpur have intercepted a conveyance/vehicle bearing No. RJ 14 GH-3065 on 27.09.2019 at NH- 123, Khanua, Distt-Bharatpur (Raj). The statement of the Driver/personin- charge of the conveyance Sh. Deenu Urf Abbas S/o Sh. Mohammad Khan resident of Village-Kakrana, Tehsil-Nagar, Bharatpur-321205(Raj) was also recorded on 27.09.2019. The goods in movement were physically inspected under the provisions of sub-section (3) of Section 68 of the CGST Act, 2017 (hereinafter referred to as the ‘Act’) read with Section 20 of the IGST Act, 2017 on 29.09.2019 and following discrepancies were noticed:-

(i) The E-way Bill was not tendered for all the Invoices/Goods in movement which are the one of the documents for transportation of goods.

2.2 The impugned goods and the conveyance used for the transportation of goods were detained under sub–section (1) of Section 129 of Central Goods and Service Tax, Act 2017 read with Section 20 of the Integrated Goods and Service Tax Act, 2017 by issuing an order of detention in FORM GST MOV-06 and the same was served on the person In charge of Conveyance on 30.09.2019.

2.3 Further, a show cause notice in FORM GST MOV-07 dated 30.09.2019 was issued and duly served with the person-in-charge of the conveyance i.e. Driver (Sh. Deenu Urf Abbas S/o Sh.Mohammad Khan resident of Village-Kakrana, Tehsil-Nagar, Bharatpur) of M/s Bullet Logistics, Padam Singh Road, Tank Road, Karol Bagh, New Delhi and Sh. Lekhram (Prop) M/s Bullet Logistics, Padam Singh Road, Tank Road, Karol Bagh, New Delhi directing them to show cause, within fourteen days from the receipt of this notice, as to why the proposed tax and penalty under Section 129 (1) of the CGST Act,2017 may be made payable by them and to get the goods and conveyance released, failing which further proceedings under the CGST Act, 2017 read with IGST Act, 2017 shall be initiated.

2.4 In view of the above, the transporter of the goods of conveyance Sh. Lekhram (Prop) M/s Bullet Logistics, Padam Singh Road, Tank Road, Karol Bagh, New Delhi came forward to pay such tax and penalty as proposed under Section 129 (1) of the CGST Act, 2017 within stipulated time of fourteen days from the date of receipt FROM GST – MOV-07, wherein they were asked to show cause as to why:-

(i) Integrated Goods & Service Tax ₹ 68,346/- + penalty ₹ 68,346/- under Section 129 (1) of the CGST Act, 2017 should not be demanded and recovered from them;

2.5 However, the respondent i.e (Sh. Lekhram, Prop- M/s Bullet Logistics, Padam Singh Road, Tank Road, Karol Bagh, New Delhi has voluntary deposited through DRC-03 the amount of IGST ₹ 68,346/- and penalty ₹ 68,346/- Total amounting to ₹ 1,36,692/- under Section 129(1) of the CGST Act, ibid on 30.09.2019 .

2.6 The adjudicating authority vide the impugned Order No. CGST/AE/DIV-F/EWB-RJ 14 GH 3065/2019/1767-68 dated 30.09.2019 has passed an order in FORM GST-09 ordering seizure of goods along with conveyance and release the same on payment of applicable tax and penalty.

3. The competent authority i.e. Commissioner, Central Goods and Service Tax Commissionerate, Alwar vide their Order-in-Review No.84/Review/2020-21 dated 26.06.2020 has reviewed the impugned Order in Original No.CGST/AE/DIV-F/EWB-RJ 14 GH 3065/2019/1767-68 dated 30.09.2019 and found not legal and proper to the extent of not passing the order under clause (b) of Sub Section (1) of Section 129 of the CGST Act, 2017 and directed the Assistant Commissioner, CGST Division-F, Bharatpur to file Appeal before the Additional Commissioner (Appeals), CGST, Jaipur within the stipulated period for determination of the correctness of the impugned order. Accordingly, the appellant department filed this appeal for the purpose of satisfying as to the correctness, legality or propriety of the impugned order.

4. The appellant also stated that application is being submitted in accordance with Notification No.55/2020- Central Tax dated 27.06.2020 amending Notification No.35/2020-Central Tax dated 03.04.2020.

5. The respondent vide this office letter No. APPL/JPR/CGST/AL/60/VIII/2020/3645 dated 24.12.2020 were called upon to file a memorandum of cross objection against the appeal, within 45 days of receipt of this notice, filed by the department. The respondent submitted their memorandum of cross objection on 08.02.2021 which is as under:-

i) We pray to consider Invoice without E-way Bill having Invoice value below ₹ 50,000/- as Govt given an option to both Registered Dealer and Transporter to not to generate E-way Bill where value of Goods carried in the conveyance is less than ₹ 50,000/-; Notification No.15/2018 dated 23.03.2018 also provide that where aggregate value of the consignment is more than ₹ 50,000/-, the transporter in respect of Interstate supply, Generate E-way Bill; but such provision was deferred and not applicable at the time of Movement of Goods under dispute.

ii) The Original Order No.CGST/AE/DIV-F/EWB-RJ 14 GH 3065/2019/1767-68 dated 30.09.2019 had imposed Tax of ₹ 68,346/- and Penalty of ₹ 68,346/- for not tendering of E-way Bill during the physical verification of vehicle, which was incorrectly calculated by the Adjudicating officer. The Actual Tax Liability on Invoices for which E-way Bills not tendered is IGST ₹ 7519/- and Penalty ₹ 7519/- . According to this there is Refund of IGST of ₹ 1,21,654/- (IGST Tax ₹ 60,827/- and IGST penalty ₹ 60,827/-).

6. Personal hearing in the instant case in virtual mode through video conference was held on 25.02.2021. Sh. Ramdev Sharma, Chartered Accountant represented the case on behalf of M/s Bullet Logistics, Padam Singh Road, Tank Road, Karol Bagh, New Delhi he reiterated the written cross objection during personal hearing. Further, he add that the respondent was authorized as the owner of the goods by the various parties hence respondent is the actual owner in the case accordingly penalty imposed under Section 129(1) (a) is justified and proper.

7. On the cross objections, the appellant has filed the written submissions which are as under:-

The respondent vide their cross objection dated 08.02.2021 have relied on grounds through mentioning Notification No.12/2018 dated 07.03.2018 and 15/2018 dated 23.03.2018 by which applicability of Rule 138(7) was deferred by the Govt till further notice hence transporter is not required to generate E-way Bill for the invoices having invoice value less than ₹ 50,000/-.

In this regard, the department/ appellant has submitted that it is beyond the purview of appeal filed by the department and Order-in- Review No.84/Review/2020-21 dated 26.06.2020.

Further, Section 107 of the CGST Act,2017 is illustrates as under:-

107(1)- Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.

If the party is aggrieved with the Order of adjudicating authority, they are required to file an appeal under Sub Section (1) of Section 107 of the Act in accordance with Rule 109 of the CGST Rules, 2017 within prescribed time limit. In view of above submission, the claim of the respondent as mentioned in their cross objection is not sustainable.

The appeal has been filed by the department on the ground that owner has failed to come forward for deposition of tax and penalty and the transporter made payment of tax and penalty under Section 129 (1) (a).

Section 129(1) (a) provide an option for payment of tax and penalty in case owner comes forward. If owner does not come forward and any person other than owner comes for payment of tax and penalty, the penalty should be equal to the fifty % of value of the goods reduced by the tax amount paid thereon under Section 129(1) (b) of the CGST Act, 2017.

8. Sh.G.R.Meena, Assistant Commissioner, Division-F, Bharatpura appeared for personal hearing on behalf of the department and sought adjournment in the case. Further, personal hearing in virtual mode through video conference was held on 04.03.2020. During personal hearing he informed that he has submitted written submission against the cross objections filed by the respondent and he reiterated the same during the personal hearing. In view of submission he requested for early decision.

Discussion and findings :

9. I have gone through the facts of the case. I find that the Issues involved in the present case for consideration are as under :

(a) Whether submissions made by respondent through cross objections are beyond the purview of appeal filed by the Appellant/Department ?

(b) Whether penalty imposed under Section 129(1)(a) of CGST Act,2017 by the Adjudicating Authority is proper or not ?

Now I take up the point No.(a)-

In respect of point No.(a), respondent has taken a plea that there was no need to generate E way bill for the invoices having value less than ₹ 50,000/- and on this ground appellant has contended that the grounds have been taken by the respondent are beyond the purview of appeal filed by the department and if the party was aggrieved with the Order of the adjudicating authority they were required to file appeal under sub section (1) of Section 107 of the CGST Act, 2017 in accordance with Rule 109 of the CGST Rules, 2017 within prescribed time limit hence the claim of the respondent in their cross objections is not sustainable.

On going through the case records and contention of both sides, I find that the appeal have been filed by the appellant being aggrieved with the penalty imposed under Section 109 (1) (a) of the CGST Act, 2017. Therefore, the respondent was required to file their cross objections upto the extent of the issue raised by the appellant in their appeal memo. But on the contrary to this, I find that the respondent has raised the fresh plea in their cross objections which I do not find proper as per provisions of Section 107(1) of the CGST Act and Rules made thereunder. If the respondent was aggrieved with the said Order in Original he should have file separate appeal within the prescribed time limits.

In view of the above, I agree with the contention of the appellant/department that the cross objections filed by the respondent is beyond the purview of appeal. Therefore, it would not be proper to discuss the issues in the instant matter which are out of scope of the appeal.

(b) Now I take up the point (b).

In respect of issue mentioned at point no.(b), I find that the appellant/department stated that while passing the impugned Order dated 30.09.2019, the Adjudicating Authority has erred to impose penalty under Section 129(1) (a) instead of Section 129(1) (b) of the CGST Act, 2017 which resulted in short payment of penalty.

Before deciding the issue, it would be proper to look into the relevant provision which is as under:-

SECTION 129. Detention, seizure and release of goods and conveyances in transit. –

(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released, –

(a) on payment of the applicable tax and penalty equal to one hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two percent of the value of goods or twenty five thousand rupees, whichever is less, where the owner of the goods comes forward to pay such tax and penalty.

(b) on payment of the applicable tax and penalty equal to the fifty per cent of the value of the goods reduced by the tax amount of paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty five thousand rupees, whichever is less, where the owner of the goods does not come forward to pay such tax and penalty.

(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed.

(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances.

(3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c).

10. On going through the records, I find that there is no dispute in the fact that the detained/seized goods were released by the Adjudicating Authority to the Transporter i.e. M/s Bullet Logistics, Padam Singh Road, Tank Road, Karol Bagh, New Delhi on payment of tax and penalty as determined by him as the actual owners of the goods did not come forward for release of the goods. Further, I find that the Adjudicating Authority has imposed the penalty equal to 100% of tax under Section 129 (1) (a) of CGST Act, 2017. In the instant case, it is fact on record that the owner of the goods failed to come forward for releasing of the detained goods and the goods were got released by the Transporter of the conveyance. Therefore, I am of the opinion that in terms of Section 129 (1) (b) of CGST Act, 2017, detained goods has to be released on payment of the applicable tax and penalty equal to the fifty per cent of the value of the goods reduced by the tax amount paid thereon where, in the instant case, the owner of the goods does not come forward to pay tax and penalty. In the instant case, penalty should have been imposed by the adjudicating authority equal to the fifty per cent of the value of the goods reduced by the tax amount paid thereon, whereas I find that adjudicating authority has imposed penalty equal to 100% per cent of the tax payable on the detained goods which is not proper and correct.

11. Further, respondent has also requested to consider invoice value below ₹ 50,000/-. But now at this stage, the same can not be considered as there is no dispute in the instant case on value of seized goods and respondent has himself voluntarily deposited the Tax and Penalty through DRC-03.

12. In view of the above discussion, legal provisions and facts available on records I allow the appeal filed by the department by modifying the Order in Original up to the extent of penalty portion. In the instant case value of seized goods is ₹ 12,83,589/- therefore, penalty is stands modified to ₹ 6,41,795/- (rounded up) under clause (b) of sub section (1) of Section 129 of CGST Act, 2017 and the penalty already deposited by the respondent may be considered for appropriation accordingly.

13. The appeal is disposed off in above manner.