This appeal has been filed under Section 107 of the Central Goods and Services Tax Act, 2017 by M/s. Prerna Export, Shivaji Nagar, Madanganj, Kishangarh, Rajasthan-305801 (hereinafter also referred to as “the appellant”) against Order No. 04/E-Way Bill/CGST Div-B/2018-19/1315 FORM GST MOV-09, dated 8-6-2019 (hereinafter referred to as “the impugned order”) passed by the Assistant Commissioner, Central Goods & Services Tax Division-B, Jaipur (hereinafter also referred to as “the adjudicating authority”).

Brief facts of the case :-

2.1 The brief facts of the case are that on 6-6-2019 at 06.00 PM a conveyance bearing No. RJ14-GE-4146 was intercepted in movement at Near Biyani College, Vidhyadhar Nagar, Jaipur by the Officers of CGST Division-B, Jaipur. The goods in movement were inspected under the provisions of sub-section (3) of Section 68 of the Central Goods and Services Tax Act, 2017 read with sub-section (3) of Section 68 of the State/Union Territory Goods and Services Tax Act or under Section 20 of the Integrated Goods and Services Tax Act, 2017 read with sub-section (3) of Section 68 of the Central Goods and Services Tax Act, 2017 and the following discrepancies were found :-

Valid E-way bill was not available with the conveyance at the time of interception. Vehicle number not updated in the E-way Bill.

2.2 In view of the above, the impugned goods and the conveyance used for the movement of goods were detained under sub-section (1) of Section 129 of Central Goods and Services Tax Act, 2017 read with sub-section (3) of Section 68 of the State/Union Territory Goods and Services Tax Act, 2017 or under Section 20 of the Integrated Goods and Services Tax 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 to Shri Mukesh Kumar Saini Driver/Person-in-charge of the conveyance on dated 7-6-2019. Further, incorporating some points, a notice C.No. V(CGST-B)15/Misc E-way case/19-20, dated 7-6-2019 in FORM GST MOV-07, dated 7-6-2019 was also issued and duly served on the person-in-charge of the conveyance and M/s. Prerna Export, Shivaji Nagar, Madanganj, Kishangarh, Rajasthan-305801, the owner of the impugned goods having GSTIN-08ACAPS7632J1ZA. Accordingly, the adjudicating authority has passed the impugned Order No. 04/E-Way Bill/CGST Div-B/2018-19/1315 in FORM GST MOV-09, dated 8-6-2019. The adjudicating authority apart from confirming the demand of Tax amounting to ₹ 1,12,488/- (IGST amounting to  ₹ 1,12,488/-) also imposed and confirmed penalty equal to one hundred percent of the Tax amounting to ₹ 1,12,488/-. The owner of the goods i.e. M/s. Prerna Export, Shivaji Nagar, Madanganj, Kishangarh, Rajasthan-305801 has deposited the Tax (IGST @ 18% ₹ 1,12,488/- and penalty equal to 100% tax vide Challan No. CPIN 19060800029049, dated 8-6-2019 and debited the same vide GST DRC-03 with debit Entry No. DC0806190020618.

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

• that the impugned order is bad in law, against the provisions of RGST & CGST Act, 2017 and against the principles of natural justice, therefore, deserves to be quashed in its entirety.
• that the only defect/discrepancy pointed out by the Learned Proper Officer i.e. AC, CGST, Jaipur is that “Valid E-way bill not available with the conveyance at the time of interception. Vehicle no. not updated in the E-way bill.” The appellant submitted the detailed reply supported with all documentary evidences and requested to release the goods and vehicle but the Learned Proper Office did not accept the same and passed the impugned order just by referring the submissions made by the appellant in his reply. The Learned Proper Officer did not give any observations or findings for such creation of demand on account of tax and interest. This finding of the Learned Proper Officer is not proper and justified in the facts and circumstances of the case as the mistakes occurred are of simply technical in nature which do not cause any revenue loss and furthermore the same were not made with any pre-determined intention to do so. Moreover, the same was not done by the appellant as this was occurred on the part of the transport company which circumstance was not in control of the appellant. Thus the impugned order is wrong and deserves to be quashed.
• that the Learned Proper Officer has grossly erred in passing the impugned order as the same has been passed without conducting any enquiry for arriving at correctness of the facts and submissions as explained/submitted by the appellant in support of his case. It is not incumbent upon the proper officer that he has to levy tax and impose penalty straightway without verification or examination of the facts and circumstances of the matter. It is totally against the principles of natural justice and deserves to be quashed.
• that the impugned order is an illegal order as the same has been based on the arbitrariness and illegal collection of tax and penalty under Section 129 of the CGST Act, 2017. The Learned Proper Officer has first got deposited the entire proposed amount of tax and penalty and thereafter passed the impugned order on same day. The deposition of demand prior to determination of the liability against the appellant has established the otherwise intention of the Learned Proper Officer and made the entire impugned order as an illegal order. It has never been the intention of the legislature to get deposition of the demand without creating the liability.
• that thus the entire impugned order is wrong and unjustified in these facts and circumstances of the case.
• that the appellant has not admitted his liability rather for an early release of the goods and vehicle he deposited the proposed tax and penalty because the proper officer was not even ready to hear him. Thus the impugned order has been passed in contravention of the principles of natural justice.
• that the show cause notice No. 1314, dated 7-6-2019 proposing therein to attend the office of the Learned Proper Office on 11-6-2019 is not a proper notice in view of the principles of natural justice as the opportunity of being heard has been given only of five days which is not proper and justified. Again the principles of natural justice have been violated in issuing the notice which is not sufficient in the eyes of law.
• that the impugned order in Form GST MOV-09 has been passed on  8-6-2019 in which the name of the person in charge has been mentioned as “Shri Mukesh Kumar Saini”. When the appellant has come forward to present his case, then passing of the impugned order in the name of the person-in-charge is wrong and illegal.
• that the Learned Proper Officer has forced the appellant to file the Form DRC-03 online which was filed against the wishes and admission of any fault on the part of the appellant.
• that the entire demand of tax and penalty of ₹ 2,24,976/- has been deposited on 8-6-2019 which is evident also from the impugned order itself, the Xerox copies of the challans are also attached herewith. This order has been communicated on 8-6-2019 and from this date the present appeal is within limitation.
• that the entire deposited amount should be allowed/directed to be refunded to the appellant as being illegally recovered by the Learned Proper Officer.

(i)         As per Rule 138(3) of CGST Rules, 2017, where the goods are transported for a distance up to 50 kms. from the place of business of the consignor to the place of business of the transporter for further transportation, the transporter may not furnish the details of conveyance in Part-B of Form GST-EWB-01 once the government itself has clarified the situation by allowing the transporter to fill up Part-B’ of the e-way bill when the goods are reloaded in a vehicle which is meant for delivery to the consignee, there remain no reasons to seize the goods and the vehicle. The order of seizure of goods and show cause notice for levy of penalty, in a mechanical manner, without incorporating reasons for not accepting the objections, thus violating the requirements of Section 129(4) was quashed.

             VSL Alloys (India) Pvt. Ltd. v. State of U.P. & Another – (2018) 30 GST & VR 60 (Allahabad HC) = 2018 (17) G.S.T.L. 191 (All.), dated 13-4-2018

(b) On the issue of imposition of penalty for wrong mentioning of GSTN and mobile number of consignee and non-production of e-way bill at the time of Inspection It was held that show cause notice was not sustainable if quantity and quality of goods consigned and payment of CGST and SGST is not disputed and E-way Bill produced a day before passing seizure order. The petition was allowed and seizure order as well as show cause notice set aside. It was directed that goods be released immediately permitting the petition to deliver the same to the consignee.

             Bhumika Enterprises v. State of U.P. – Writ Tax No. 564 of 2018, decided on 3-4-2018 by Allahabad HC reported in (2018) 51 TUD 45 (Allahabad HC) = 2018 (12) G.S.T.L. 137 (All.)

(iii)      The discretion to impose penalty must be exercised judicially. A penalty will ordinarily be imposed in case where the party acts deliberately in defiance of law, but not in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable under the Act. An order imposing penalty for failure to carry out a statutory obligation is the result of quasi-judicial proceedings. Penalty will not be ordinarily imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. Penalty will not be imposed merely because It is lawful to do so. Even if a minimum penalty is prescribed, the Authority is lawful to do so. Even if a minimum penalty is prescribed, the Authority will be justified in refusing to impose penalty, when there is a technical or venial breach of the Actor where breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the Statute.

             Hindustan Steel Limited v. State of Orissa – (1970) 25 STC 211 (Supreme Court) = 1978 (2) E.L.T. (J159) (S.C.)

             If a human error which can be seen on naked eye is detected, such human error cannot be capitalized for penalization. Normally, this court could not have persuaded to accept the contention on prima facie value as it is a matter for decision by competent authority.

             If the petitioner had paid the IGST In accordance with the value as shown in the original bill, goods cannot be detained and shall be released to the petitioner.

             Rai Prexim India Private Limited v. State of Kerala (Kerala High Court), decided on 4-12-2018 in Writ Petition (Civil) No. 39022 of 2018 [2019 (23) G.S.T.L. 454 (Ker.)].

             The Xerox copies of the above judicial pronouncements are also being submitted herewith for your ready reference and record.

• that instant case is of purely technical and venial defect in nature which was not with the deliberate intention to avoid or evade any tax under the provisions of law as the Attached LR, BE, INVOICE is belongs to Jaipur branch office as 100% operation take place from Jaipur office and was to be delivered at Banipark Jaipur but during delivery the goods were detained in transit close to Jaipur office on the ground that the goods were likely to be transport to Kishangarh instead of Jaipur as the E-way bill was auto generated for Kishangarh and appropriate correction was not done. The appellant explained the entire things/happenings to the Learned Proper officer during the proceedings but the Learned Proper Officer did not even think it proper to conduct enquiry in the matter before proceeding further. Thus in the absence of any enquiry the principles of natural justice have been violated by the Learned Proper Officer which vitiates the entire proceedings as illegal.
• that the present case is fully covered with the Circular No. 64/38/2018-GST, dated 14-9-2018 issued by GST Policy wing of Central Board of Indirect Taxes and Customs, the copy of which is also attached herewith for your record and ready reference. As per this Circular, the penalty provisions of Section 125 attract in the instant case which should not be more than 1,000/- for such an offence which is technical in nature and without any deliberate intention to avoid and evade any tax under the statutes.

4. Personal hearing in the case has been held on 25-2-2020. Shri V.K. Gogra, Advocate and Shri Anil Sharda, Proprietor appeared for personal hearing. They explained the case in detail and reiterated the submission made in their appeal memorandum and submitted additional written submission & requested to decide the case on the basis of documents and submission made by them.

5. I have carefully gone through the case records and detail submissions made by the appellant in their appeal memorandum as well as additional written submissions submitted at the time of personal hearing held on 25-2-2020.

6. I find 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.

7. 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 :

(2) Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or a public conveyance, by road, the said person shall generate the e-way bill in FORM GST EWB-01 electronically on the common portal after furnishing information in Part B of FORM GST  EWB-01.

(3) Where the e-way bill is not generated under sub-rule (2) and the goods are handed over to a transporter for transportation by road, the registered person shall furnish the information relating to the transporter on the common portal and the e-way bill shall be generated by the transporter on the said portal on the basis of the Information furnished by the registered person in Part A of FORM GST EWB-01 :

Provided further that where the movement is caused by an unregistered person either in his own conveyance or a hired one or through a transporter, he or the transporter may, at their option, generate the e-way bill in FORM GST EWB-01 on the common portal in the manner specified in this rule :

Provided also that where the goods are transported for a distance of upto fifty kilometers within the State or Union territory from the place of business of the consignor to the place of business of the transporter for further transportation, the supplier or the recipient, or the case may be, the transporter may not furnish the details of conveyance in Part B of FORM GST EWB-01.

(4) Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall made available to the supplier, the recipient and the transporter on the common portal.

(5) 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. Thus I find that driver of the vehicle was compulsorily required to carry a valid E way Bill.

8. Further, I find that 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 I find 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, I also find 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. The case laws cited by the appellant in their defence is not squarely applicable in the instant case.

9. In view of the above discussion and findings and after considering the legal requirement of documents in the instant case. I hereby reject the appeal filed by the appellant.