Appeal allowed, penalty recalculated under Section 129(1)(b) of CGST Act, 2017.

The appeal was allowed by modifying the original order regarding the penalty. The penalty was recalculated to Rs. 6,41,795 under Section 129(1)(b) of the CGST Act, 2017, and the penalty already deposited by the respondent was appropriated accordingly. The appeal was disposed of in this manner.

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Issues Involved:
1. Whether submissions made by the respondent through cross objections are beyond the purview of the appeal filed by the Appellant/Department.
2. Whether the penalty imposed under Section 129(1)(a) of the CGST Act, 2017 by the Adjudicating Authority is proper or not.

Issue-wise Detailed Analysis:

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

The respondent argued that there was no need to generate an E-way bill for invoices with a value less than Rs. 50,000, referencing Notification No.15/2018 dated 23.03.2018. The appellant countered that these grounds were beyond the scope of the appeal and that the respondent should have filed a separate appeal under Section 107(1) of the CGST Act, 2017 if aggrieved by the original order.

Upon reviewing the case records and contentions, it was found that the appeal was filed by the appellant against the penalty imposed under Section 129(1)(a). Therefore, the respondent was required to file cross objections only related to this issue. The respondent's fresh plea about the E-way bill was deemed improper as per Section 107(1) of the CGST Act. The respondent should have filed a separate appeal within the prescribed time limits if aggrieved by the original order. Thus, the cross objections filed by the respondent were beyond the purview of the appeal and were not considered for discussion.

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

The appellant argued that the Adjudicating Authority erred by imposing a penalty under Section 129(1)(a) instead of Section 129(1)(b), resulting in a short payment of the penalty. Section 129(1)(a) applies when the owner of the goods comes forward to pay the tax and penalty, whereas Section 129(1)(b) applies when the owner does not come forward, requiring a penalty equal to fifty percent of the value of the goods reduced by the tax amount paid.

It was undisputed that the goods were released to the transporter, not the actual owner. The adjudicating authority imposed a penalty equal to 100% of the tax payable under Section 129(1)(a), which was incorrect. Since the owner did not come forward, the penalty should have been imposed under Section 129(1)(b), which is fifty percent of the value of the goods reduced by the tax amount paid.

The respondent's request to consider invoice values below Rs. 50,000 was also rejected as there was no dispute on the value of the seized goods, and the respondent had voluntarily deposited the tax and penalty.

Conclusion:

The appeal was allowed by modifying the original order regarding the penalty. The penalty was recalculated to Rs. 6,41,795 under Section 129(1)(b) of the CGST Act, 2017, and the penalty already deposited by the respondent was appropriated accordingly. The appeal was disposed of in this manner.

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