This appeal has been filed under Section 107 of the Central Goods and Service Tax Act, 2017 by The Assistant Commissioner(Review), CGST, Commissionerate, Alwar (hereinafter also referred to as “the appellant or department” also) in view of Order-in-Review No.93/Review/2020-21 dated 27.08.2020 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.01/2020 dated 27.01.2020 (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 Chawla Transport Company, Deeg Road, Kumher Gate, Bharatpur (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 05 GB 2582 on 23.01.2020 at Bharatpur-Alwar Road, Bharatpur. The statement of the Driver/person in- charge of the conveyance Sh. Om Prakash was also recorded on 23.01.2020. 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 Section 20 of the IGST Act, 2017 on 26.01.2020 and following discrepancies were noticed:-

(a) The genuineness of the goods in transit (its quantity etc) and/or tendered documents required further verification.

(b) E-way Bill not generated for consignments having value more than ₹ 50,000/-.

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 on 26.01.2020.

2.3 Further, a show cause notice in FORM GST MOV-07 was issued and duly served on 26.01.2020 with the person-in-charge of the conveyance i.e. Driver (Sh.Om Prakash of M/s Chawla Transport Company, Deeg Road, Kumher Gate, Bharatpur, Rajasthan) and Sh. Naresh Chawla, Owner of M/s Chawla Transport Company, Deeg Road, Kumher Gate, Bharatpur, Rajasthan directing them to show cause, within fourteen days from the receipt of this notice, as to why the proposed tax and penalty 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. The notice was received by the respondent i.e. Sh.Naresh Chawla, Owner of M/s Chawla Transport Company, Deeg Road, Kumher Gate, Bharatpur, Rajasthan on 26.01.2020.

2.4 In view of the above, the owner of conveyance Sh.Naresh Chawla, (M/s Chawla Transport Company, Deeg Road, Kumher Gate, Bharatpur, Rajasthan) came forward to pay such tax and penalty as proposed under Section 129 (1) (a) of the Act 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) Central Goods & Service Tax ₹ 13689/- + State Goods & Service Tax ₹ 13689/- and Cess ₹ 33642/- under Section 129 (1) and penalty under Section 129 (1) (a) should not be demanded and recovered from them;

2.5 However, the respondent i.e (Sh.Naresh Chawla, Owner of M/s Chawla Transport Company, Deeg Road, Kumher Gate, Bharatpur, Rajasthan) has voluntary deposited the amount of CGST ₹ 13689/- + SGST ₹ 13689/- and Cess ₹ 33,642/- and penalty CGST ₹ 13689/- + SGST ₹ 13689/- and Cess ₹ 33,642/- Total amounting to ₹ 1,22,040/- under Section 129(1) and 129 (1) (a) of the Act, ibid on 27.01.2020 .

2.6 The adjudicating authority vide the impugned order No.01/2020 dated 27.01.2020 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.93/Review/2020-21 dated 27.08.2020 has reviewed the impugned Order in Original No.01/2020 dated 27.01.2020 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(Review), CGST Commissionerate, Alwar 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 letter No. APPL/JPR/CGST/AL/73/VIII/2020/3653 dated 28.12.2010 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 02.02.2021 which is as under:-

i) During the time of release of goods it was not possible to come every owner of goods for release goods due to distance and other business work reasons. So all owners of goods granted me the right to treat as owner of goods and permit me to release the goods after offset all Tax, Penalties and other liabilities. So that time I was treating as Owner of goods. I also declared all about these in attached affidavit.

ii) I already paid all the tax and penalties which was imposed on me as per act at that time through DRC-03 and requested to give me relief, as during the lockdown due to COVID all business activities was already stopped and I also effected from this lockdown, from another penalty which imposed on me by the Order in Review No.93/Review/2020-21 dated 27.08.2020 passed by the Commissioner, CGST, Alwar (Raj).

6. Personal hearing in the instant case in virtual mode through video conference was held on 25.02.2021. Sh.G.R.Meena, Assistant Commissioner, Division-F, Bharatpura appeared for personal hearing on behalf of the department. He reiterated the grounds of appeal during personal hearing. He has nothing more to add besides the written submission. On the other hand Sh. Arun Kumar, Tax Consultant appeared for personal hearing on behalf of the respondent i.e. Sh. Naresh Chawla, Owner of M/s Chawla Transport Company, Deeg Road, Kumher Gate, Bharatpur, Rajasthan. He reiterated the cross objection submitted by his client. During PH he pleaded that the appeal filed by the department is beyond the period of appeal as prescribed under Section 107 of CGST Act, 2017, hence appeal is not maintainable. Further, he stated that the owner of the goods had authorized to the Transporter/his client to take necessary action/ or take part of any proceedings on behalf of them. Accordingly, his client pay the taxes and penalty and got release the goods and there was no other penalty upon him. In view of the submission both parties has requested to decide the case at the earliest.

Discussion and findings :

7. 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 the appeal filed by the appellant is beyond the period of appeal or not as prescribed under Section 107(2) of CGST Act,2017 ?

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

(a) In respect of issue at S. No. (a) I find that :-

During personal hearing respondent has stated that the appeal filed by the department in the instant matter is beyond the period of appeal hence the appeal in the first instance is not maintainable. In order to verify the correctness of the respondent plea I have gone through the case records and I find that Order in Original was passed in this case on 27.01.2020 and the same was communicated on 30.01.2020 whereas, the appeal filed by the appellant in the instant case on 31.08.2020 which is beyond the period of six month as prescribed under Section 107(2) of CGST Act, 2017. However, on going through the appeal memorandum I observed that the appeal has been filed by the appellant or department in accordance with the Notification No.55/2020-Central Tax dated 27.06.2020 amending Notification No.35/2020-Central Tax dated 03.04.2020. By the said Notification, the period for filing of appeal has been extended upto 31st December-2020 which is squarely applicable in the instant case. In view of this I find that there is no force in the contention of the respondent that the appeal has been filed beyond the period of appeal and therefore appeal is absolutely maintainable.

(b) Now I take up the second point (b).

In this context, the respondent submitted that during the time of release of goods it was not possible to come every owner of goods for release of goods due to distance and other business work reasons. So all owners of goods granted the right to treat as owner of goods and permit them to release the goods after offset all Tax, Penalties and other liabilities. So that time the respondent was treated as owner of goods. In this support, the respondent has also submitted an affidavit which is on judicial stamp paper of ₹ 100/- in which the same plea has been reiterated. Further I also find that in this case, the appellant or department stated that while passing the Order dated 27.01.2020, the Adjudicating Authority has erred in instant order 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).

8. 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. Sh.Naresh Chawla, Owner of M/s Chawla Transport Company, Deeg Road, Kumher Gate, Bharatpur, Rajasthan 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% 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 whereas, 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.

9. Further, respondent has sought leniency on account of his financial crisis due to the situation arised by the COVID. But the same can not be considered as there is no such provisions available under the CGST Act/Rules made thereunder.

10. 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 the goods is ₹ 1,23,312/- therefore, penalty is stands modified to ₹ 61,656/- under clause (b) of sub section (1) of Section 129 of CGST Act, 2017 and the penalty already deposited by the respondent may be appropriated accordingly.

11. The appeal is disposed off in above manner.