This appeal has been filed under Section 107 of the Central Goods and Service Tax Act, 2017 by Shri Prateek Garg, M/s Mahesh Iron Steel Re-Rolling Mills, RIICO Industrial Area, Beawar Road, Ajmer(Raj) (hereinafter also referred to as “the appellant”) against Order-in-Original No.07/CGST/Div-J/Ajmer/2019/8996 dated 05.12.2019 (hereinafter referred to as “the impugned order”) passed by Assistant Commissioner, CGST, Division-J, Ajmer (hereinafter also referred to as “the adjudicating authority”),

2.  Brief Facts of the case :-

2.1 The appellant having GSTIN No.08AAFFM2476HIZ5 is a Dealer. On 15.11.2019, the officers of the CGST Division-J, Ajmer have intercepted a conveyance bearing No. RJ 14-1G-7711 at 11.30 AM at outside of M/s Mahesh Iron and Steel Re-rolling Mills, RIICO Industrial Area, Beawar Road, Ajmer (Raj). After recording the statement on 15.11.2019 of Driver and person In-charge of vehicle Shri Shakti Singh S/o Sh. Ram Singh, Village Chawndiya, Teh, Kekri, Ajmer, the goods in movement were inspected under the provisions of sub-section (3) of Section 68 of the CGST Act, 2017 (hereinafter referred to as the ‘Act’) read with sub section (3) of Section 68 of the State/Union Territory Goods and Services Tax Act or under Section 20 of the IGST Act, 2017. On examination of the documents, the following discrepancies were noticed:-

(i) The goods loaded in the vehicle bearing No. RJ 14-1G-7711 were covered under Invoice No. 1235 dated 14.11.2019 issued by M/s Pratap and Sons, A-264, Madri Industrial Area,Udaipur-313003 (GSTIN No.08AIKPA7138FIZD) having E way Bill No.731103481404 was meant for delivery to M/s Shri Nath Steel, Near Annapurna Nagar, Opp Bheru Ji Mandir, Jaitaran Pali- 306302 (GSTIN No.08BJZPK4880MIZ3). Instead, the goods were intercepted in front of the factory premises of M/s Mahesh Iron and Steel Re-rolling Mills, RIICO Industrial Area, Beawar Road, Ajmer (Raj) which is completely off route and no valid E way Bill in favour of goods transported to M/s Mahesh Iron and Steel Re-rolling Mills, RIICO Industrial Area, Beawar Road, Ajmer (Raj) was available with the driver.

2.2 The goods and conveyance used for movement of goods were detained under sub-section (1) of Section 129 of CGST, Act 2017 read with sub section (3) of Section 68 of the CGST Act, 2017 by issuing an order of Detention in FORM GST MOV-06 and the same was served on the person incharge of the conveyance Shri Shakti Singh on 15.11.2019.

2.3  Further, Sh. Prateek Garg, Partner of M/s Mahesh Iron and Steel Rerolling Mills, RIICO Industrial Area, Beawar Road, Ajmer (GSTIN No.08AAFFM2476HIZ5) has claimed the ownership of goods loaded in the vehicle No. RJ 14-1G-7711 and also agreed to deposit the taxes and penalty applicable as per law. Accordingly, a notice in FORM-07 dated 16.11.2019 was issued and duly served to M/s Mahesh Iron and Steel Re-rolling Mills, RIICO Industrial Area, Beawar Road, Ajmer (Raj) as well as Shri Shakti Singh, Driver/person In-charge of conveyance bearing No. RJ 14-1G-7711 providing them an opportunity to show cause against the demand of tax and penalty as applicable and make payment of the same and to get the goods released.

3. Further, the adjudicating authority vide impugned Order No.07/CGST/Div-J/Ajmer/2019/8996 dated 05.12.2019 vide FORM GST MOV-09 dated 05.12.2019 passed the order as under:

(i)  Confirmed the CGST ₹ 34,794/- along with equal penalty and SGST ₹ 34,974/- along with penalty against M/s Mahesh Iron and Steel Re-rolling Mills, RIICO Industrial Area, Beawar Road, Ajmer (Raj) in exercise of the power conferred under Section 129(3) of the CGST Act, 2017 read with SGST Act, 2017 read with Section 129(1) (c ) ibid.

The impugned goods and conveyance used for transport of goods were released after submitting a Bank Guarantee No.0060319BG0000011 dated 18.11.2019 along with Bond for provisional release of goods and conveyance, and considering the same the vehicle and the goods were leased on 19.11.2019.

4. Being aggrieved with the impugned order, the appellant has filed the appeal on various grounds which are summarized as under:

• that the learned Asstt Commissioner CGST Dn-J erred in charging tax & penalty vide order 07/CGST/Div-J/Ajmer/2019/8996 dated 05.12.2019 date 05.12.2019 without appreciating the full facts and circumstances of the case.
• that the order is bad-law. No evasion of tax liability was there & all transactions were in between registered dealer. No tax and penalty even otherwise should be levied so as to avoid violation of double taxation on same goods of registered parties. There can not be double taxation as per articles of Constitution of India. There were proper E-way also with invoices.
• that there is no restriction in movement goods in transit within stipulated time with proper invoice reach at final destination of delivery even otherwise.
• that the assessee reserves his rights to add, amend or alter any of the grounds on or before the date of hearing.
• that the learned Asstt. Commissioner CGST Division Ajmer erred in not considering the detailed reply dtd. 22-11-19 showing the circumstances for diversion of Goods from Jaitaran to Ajmer with proper Invoice & E-way bill. There was subsequent sale in transit & hence forth the Goods moved for Ajmer instead of Jaitaran i.e the original consignee firm &/or purchaser who had sold the goods as subsequent seller to us & accordingly we were subsequent purchaser for which there was proper Invoice &/or E-way bill & the goods were lying in same vehicle which was transported from Udaipur to Jaitran with proper Tax Invoice & E-way bill also. As such there were three parties, one original seller of Udaipur & second is purchaser of Udaipur party i.e. Jaitaren dealer & third we the last purchaser from Jaitran Party with Complete Tax Invoice &/or E-way. As such at the time of Inspection of vehicle there was proper tax Invoice GR & E-way Bill, who Inade subsequent sale in transit to us by issuance of tax Invoice & E-way bill shown to AA immediately within 1 hour during the period of Inspection & without taking the vehicle inside the factory premises for delivery of Goods for waiting of E-way bill & tax Invoice.
• that the AA Considered the transit Completely off route & E-way bill as no valid E-way bill because of issued in the name of Jaitanan party which was also not affected the tax liability because of full tax i.e. SGST & CGST as applicable were charged by the consignee firm of Rajasthan & Consignee firm of Rajasthan & all the three parties involved in three transactions of sale are duly registered dealer having GST number as shown in detailed reply. There was no evasion of any tax liability & hence the AA not proved any evasion of tax in this transit by his enquiry.

The following case law cited in their defence:

Kerala High Court in (2019) 4 GST Update page 93- Held

Gujarat High Court in (2019) GST update page 95- Held

Allahabad High Court In(2018) 29 J.K. Jain GST & V.R.Page 169

M/S Bhumika Enterprises v/s State of UP- Held

K P Sugandh Ltd., V/s State of Chhattisgarh, Commissioner Chhattisgarh GST, Atal Nagar & Ors.

Rajasthan High Court in (2013)60 VST in the case of ACTO V/s KS Oil Ltd.,

5.  Personal Hearing in the case was held on 21.09.2020. Shri O.P. Maheshwari, Chartered Accountant appeared for personal hearing through video conference. He explained the case in detail and reiterated the submission already made in the grounds of appeal. He further requested to decide the case at the earliest.

6.  I have carefully gone through the case records, grounds of appeal and also additional written submissions dated nil received in this office on 03.07.2020.

7.  I find that the adjudicating authority have confirmed demand of Tax and Penalty on the ground that the goods loaded in the vehicle bearing No.RJ-14-1G-7711 were covered under Invoice No. 1235 dated 14.11.2019 issued by M/s Pratap and Sons, A-264, Madri Industrial Area, Udaipur-313003 having E way Bill No. 731103481404 was meant for delivery to M/s Shri Nath Steel, Near Annapurna Nagar, Opp Bheru Ji Mandir, Jaitaran Pali-306302. Instead, the 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 no valid E way Bill in favour of impugned goods i.e. MS Scrap (7204), quantity 18150 Kg valued ₹ 3,86,595/- transported to the appellant i.e. M/s Mahesh Iron and Steel Re-rolling Mills, RIICO Industrial Area, Beawar Road, Ajmer (Raj) was available with the driver/person In-charge of the conveyance. In this regard, the contention of the appellant is that there was subsequent “sale in transit” and henceforth the Goods moved for Ajmer instead of Jaitaran, Pali i.e the original consignee firm or purchaser who had sold the goods as subsequent seller to the appellant and accordingly they were subsequent purchaser for which there was proper Invoice and E-way bill & the goods were lying in same vehicle which was transported from Udaipur to Jaitran, Pali with proper Tax Invoice & E-way bill also. As such there were three parties, one original seller of Udaipur & second is purchaser of Udaipur party i.e. jaitaran dealer & third we the last purchaser from Jaitran Party with Complete Tax Invoice and E-way Bill.

Now the issue to be decided whether the Driver of the vehicle in movement was having the valid document at the time of interception or otherwise.

8. As per Rule 138 of the CGST Rules, 2017 (1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees 

(i) in relation to a supply; or 

(ii) for reasons other than supply; or

(iii) due to inward supply from an unregistered person,

shall, before commencement of such movement, furnish information relating to the said goods as specified in Part A of FORM GST EWB-01, electronically, on the common portal along with such other information as may be required on the common portal and a unique number will be generated on the said portal

Provided that the transporter, on an authorization received from the registered person, may furnish information in Part A of FORM GST EWB-01*, electronically, on the common portal along with such other information as may be required on the common portal and a unique number will be generated on the said portal

9. Further 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 the 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 :

(2)  A registered person may obtain an Invoice Reference Number from the common portal by uploading, on the said portal, a tax invoice issued by him in FORM GST INV-1* and produce the same for verification by the proper officer in lieu of the tax invoice and such number shall be valid for a period of thirty days from the date of uploading.

(3)  Where the registered person uploads the invoice under sub-rule (2), the information in Part A of FORM GST EWB-01* shall be auto-populated by the common portal on the basis of the information furnished in FORM GST INV-1*

(4)  The Commissioner may, by notification, require a class of transporters to obtain a unique Radio Frequency Identification Device and get the said device embedded on to the conveyance and map the e-way bill to the Radio Frequency Identification Device prior to the movement of goods.

(5)  Notwithstanding anything contained in clause (b) of sub-rule (1), where circumstances so warrant, the Commissioner may, by notification, require the person-in-charge of the conveyance to carry the following documents instead of the e-way bill.

(a)  tax invoice or bill of supply or bill of entry; or

(b)  a delivery challan, where the goods are transported for reasons other than by way of supply.

10. I find 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, I find that 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 Sh.Shrawan at the defined address of M/s Mahesh Iron and Steel Re-rolling Mills, RIICO Industrial Area, Beawar Road, Ajmer. Further, it is also evident from the timing of generation of the second E way Bill No. 771103594733 dated 15.11.2019 which is generated at 12.33 PM after interception of conveyance by the officers in the name of appellant.

11. 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. I do not find force in the contention of the appellant.

12. From the above discussion and findings 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. Thus, I find no infirmity in the impugned order passed by the adjudicating authority.

I reject the appeal filed by the appellant.