2023 (6) TMI 444 - HC - GST

Exporters Win: Disproportionate Penalties Struck Down, Authorities Ordered to Reassess Fines Fairly and Refund Excess Charges

Usha Gupta Versus The Assistant Commissioner of Revenue, Bureau of Investigation, North Bengal, Siliguri Headquarters & ors.

The SC reviewed a case involving export goods detention and penalty imposition. The court found excessive penalties were incorrectly applied, set aside ... Levy of penalty equal to 200% - Detention of consignments - quantity of the boxes were lesser than the quantity shown in the document - IGST not charged - alleged discrepancy in the export invoice and the purchase order - HELD THAT:- So far as the issue relating to not mentioning charging IGST the appellate authority has granted relief in favour of the appellant assessee. So far as the aspect of discrepancy is concerned the learned advocate appearing for the appellant has produced before us a copy of the sales order which shows the sales order number as SG/2022-23/004 dated 23rd April, 2022. The purchase order placed by the purchaser from Bhutan shows the sales order number correctly and in the said purchase order license number of the purchase has been given as SAB84282. In the export invoice, which was generated by the appellant, buyer’s license number has been shows as buyer’s order number. This cannot be treated as a discrepancy because in the purchase order of the buyer the sales order number has been correctly shown as SG/2022-23/004. Therefore, on this ground the authorities could not have imposed 200% penalty on the entire consignment. Shortage of quantity of goods - HELD THAT:- It is submitted by the learned counsel for the appellant that even at the time of detention of the goods, the appellant expressed his willingness to pay penalty for the shortage of quantity of the goods. However, the authority while passing the penalty order has imposed penalty on the entire consignment which includes the amount of cess paid by the appellant. The writ petition stand disposed of by setting aside the order passed by the appellate authority for levying penalty on the entire consignment and the matter is remanded back to the appellate authority to recalculate to take note of the order and recalculate the penalty in respect of shortage in quantity and over than quantity penalty shall be levied at 200% and the remaining penalty which has been remitted by the appellant shall be refunded to the appellant within a period of eight weeks from the date of receipt of the server copy of the order. Issues involved: The judgment involves issues related to the detention of goods for export, discrepancies in documentation, and imposition of penalties.Detention of Goods: The case involved the detention of two consignments by the appellant for export to Bhutan due to alleged discrepancies in the quantity of boxes and non-charging of IGST. The appellate authority granted relief regarding the IGST issue. The discrepancy in the export invoice and purchase order was also raised, but it was clarified that there was no actual discrepancy as the sales order number was correctly shown in the purchase order.Imposition of Penalties: The authorities imposed a 200% penalty on the entire consignment, including the cess paid by the appellant, for the shortage of goods. The judgment set aside the penalty order and remanded the matter back to the appellate authority to recalculate the penalty. It was directed that penalties for shortage and excess quantity should be levied appropriately, and the excess penalty paid by the appellant should be refunded within eight weeks.This judgment highlights the importance of accurate documentation in international trade transactions and the need for authorities to impose penalties proportionately based on actual discrepancies.