2021 (4) TMI 996 - Commissioner - GST

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 ... Detention, seizure and release of goods and conveyances in transit under Section 129 - Penalty under Section 129(1)(a) versus Section 129(1)(b) - Liability of owner and transporter for payment on release of detained goods - Scope of cross objections in an appeal under Section 107Scope of cross objections in an appeal under Section 107 - Cross objections raising new grounds beyond the scope of the departmental appeal are not maintainable in the appeal proceedings. - HELD THAT: - The appeal was filed by the department against the penalty portion of the adjudicating authority's order. The respondent's cross objections advanced a fresh plea concerning the requirement to generate E-way Bills for consignments below a specified value, a matter not raised by the appellant. The Appellate Authority held that a respondent in cross objection may only contest matters within the scope of the grounds raised by the appellant under Section 107(1) and the relevant rules; fresh grounds ought to have been pursued by the respondent by filing a separate appeal within the prescribed time. Accordingly the cross objections raising issues outside the departmental appeal were held to be beyond the purview of the present appeal and were not entertained. [Paras 9]Cross objections that raise fresh grounds not falling within the scope of the departmental appeal are beyond the purview of the appeal and are not to be considered in these proceedings.Detention, seizure and release of goods and conveyances in transit under Section 129 - Penalty under Section 129(1)(a) versus Section 129(1)(b) - Liability of owner and transporter for payment on release of detained goods - Penalty was to be imposed under Section 129(1)(b), not under Section 129(1)(a), because the owner of the goods did not come forward and the transporter paid for release. - HELD THAT: - Section 129 provides distinct consequences depending on whether the owner of the goods comes forward to pay the tax and penalty (clause (a)) or does not (clause (b)). The record established that the actual owners did not come forward and the transporter effected payment for release. The adjudicating authority had applied clause (a) and imposed a penalty equal to 100% of the tax payable, which is proper only when the owner comes forward. Where the owner does not come forward, clause (b) mandates release on payment of the applicable tax and a penalty equal to fifty per cent of the value of the goods reduced by the tax paid. Applying this statutory scheme to the facts, the Appellate Authority found the penalty as imposed to be incorrect and modified the impugned order accordingly, directing appropriation of amounts already deposited. [Paras 10, 12]The penalty imposed by the adjudicating authority is modified to the quantum payable under Section 129(1)(b) as the owner did not come forward; amounts already deposited shall be appropriated accordingly.Final Conclusion: The appeal is allowed in part: the respondent's cross objections that raise fresh grounds outside the scope of the departmental appeal are not entertained, and the impugned order is modified by substituting the penalty under Section 129(1)(b) (applicable where the owner did not come forward) in place of the penalty earlier imposed under Section 129(1)(a); amounts already deposited are to be appropriated in accordance with this modification. 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.