Expired e-way bill penalty reduced after finding no intent to evade; penalty fixed at Rs.1,00,000.

Levy of a 200% penalty for transport with an expired e-way bill was reduced because the adjudicating authority failed to address the appellant's reply and did not find any intention to evade tax; substantive proof showed a valid e-way bill earlier generated, incorporation of invoice number, and tax payment. The authority also computed penalty on a value higher than the invoice without adequate reasoning or evidence, warranting reduction. The court granted partial relief, allowing the appeal in part and fixing the appellant's liability at Rs. 1,00,000 for failure to extend the e-way bill after expiry.

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Issues: Whether penalty under Section 129 of the Central Goods and Services Tax Act, 2017 could be imposed where the e-way bill had expired for more than four days but there was no evidence of intention to evade tax, and whether relief by reduction of the prescribed 200% penalty is warranted in the facts of the case.

Analysis: The statutory scheme (Section 129 and Rule 138 of the CGST Rules) prescribes detention/seizure and fixed penal percentages for transporting goods without valid documents and sets out rules for validity and extension of e-way bills. The factual record shows an e-way bill generated prior to movement, multiple breakdowns during transit with some corroboration (including a crane receipt), absence of any allegation or material indicating an intent to evade taxes, and procedural defects in adjudication such as non-application of mind to the appellant's specific factual explanations and an unexplained enhancement of assessable value. Given the rigid statutory penalty, it remains open to review whether, in light of the admitted facts and absence of mens rea, some leniency is appropriate. Consideration of documentary evidence accompanying goods and assessment of whether authorities afforded a fair opportunity to the appellant are relevant to mitigation of penalty even though the statutory maxima exist.

Conclusion: The imposition of the full 200% penalty is not sustained on these facts; a reduced penalty of Rs. 1,00,000 is directed to be retained and the balance of amounts paid by the appellant is to be refunded within three months without interest. The appeal is partly allowed on these terms.

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