TaxTMI 
TaxTMI 
2026 (9) TMI 1410
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....llant). While on vehicle checking duty on 4/5/2023, SGST Authorities intercepted and checked vehicle bearing No. KL03 AG 2784 carrying 'Aluminium Colour Coated Coils, G.I. Sheets' from M/s Roofstyle Industries Thripunithura, to M/s Metalloids India, Pathanamthitta. The SGST authorities alleged that the impugned goods were not accompanied by valid documents under GST Rules. It was also alleged that no E-way bill was seen accompanying the consignment. 2.2 The taxpayer was charged with violation of section 31 read with Rules 46, 55 and 138(1) of the GST Rules and vide Order No. ZD320523011895K dated 18.05.2023 penalty of Rs. 1,25,442/- each under the CGST and SGST Act aggregating to Rs.2,50,884 was imposed under Section 129(3) of the CGST/SGST Act. The Appellant remitted the entire amount to secure immediate release of the goods and conveyance and filed an Appeal before the Appellate Authority. 2.3 The Appellate Authority vide the impugned order dismissed the appeal filed by the appellant and upheld the order imposing penalty. 3. Grounds of Appeal: The Appellant / Assessee has filed the present appeals against the impugned order of Joint Commissioner (Appeals), SGST, Kotta....
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.... unsustainable. 3.7 The movement was between registered taxable persons. The principal and the job worker are registered dealers. The entire movement was reflected in GST records. Consequently, there was absolutely no possibility of tax evasion or loss to the revenue. 3.8 The Proper Officer mechanically invoked Section 129 merely because he entertained an erroneous view regarding documentation. Section 129 cannot be converted into a penal provision for every procedural irregularity. 3.9 The order under Section 129(3) is a cryptic order. It does not discuss the objections raised by the Appellant nor does it assign any reasons for rejecting the explanation. The mandatory requirement of a reasoned and speaking order has therefore been violated. 3.10 The Joint Commissioner (Appeals) merely reproduced the submissions of the Appellant but failed to independently analyze the statutory provisions, documentary evidence and legal contentions. The appellate order does not record findings on the principal issues arising for consideration and is therefore unsustainable. 3.11 The authorities completely overlooked the beneficial statutory scheme governing job work under Section 143....
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....s not confined to declaring the value of that service - it must reflect the value of the physical consignment being moved. On a return-from-job-work movement, the e-way bill value should properly capture the original material value together with the job-work charges, so that the document accurately reflects what is physically present in the vehicle. 4.4 An e-way bill confined to the incidental service charge of Rs.1,841, while Rs.6,96,900 worth of material was actually in transit, understates the consignment by more than 99.7% of its true value. This is not a clerical or technical shortfall capable of being excused as a bona fide difference of interpretation - it is a valuation failure of a magnitude that independently attracts scrutiny and penalty under Section 129. 4.5 This analysis does not introduce a new case; it sharpens and substantiates the very finding already recorded in FORM GST MOV-07 - that "E-way bill is not seen accompanying along with the consignment." The verified facts now establish precisely why that finding was correct as a matter of documentary fact: the return e-way bill did not merely reflect an arguably lower value - it affirmatively declared zero quan....
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....escription, quantity and HSN of the goods, job work charges collected and GST paid on the said job work charges. Therefore, we find that the impugned goods were accompanied by a valid tax paid invoice. Once the goods are accompanied by a valid tax paid invoice, there is no requirement of any delivery challan. 5.3 Notwithstanding the above, we find that the in terms of para 8.4(i) of CBIC Circular No.38/12/2018 dated 26/3/2028, (i) Where goods are sent by principal to only one job worker: The principal shall prepare in triplicate, the challan in terms of rules 45 and 55 of the CGST Rules, for sending the goods to a job worker. Two copies of the challan may be sent to the job worker along with the goods. The job worker should send one copy of the said challan along with the goods, while returning them to the principal. We find that as per Annexure to the statement of the driver in Form GST MOV-04, delivery challan no 3 dated 4/5/2023 issued by M/s Metalloids India (principal) was one of the documents tendered at the time of interception. We therefore find that the appellant has fully complied with the statutory requirements in this regard. We therefore find that contra....
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....e find that prima facie the allegation regarding validity of e-way bill was not part of the SCN and the OIO cannot be permitted to introduce this new ground which is dehors the SCN. On this ground alone the OIO is seen to have vitiated the principles of natural justice by introducing an element not stated in the SCN and is therefore liable to be set aside for this reason alone. Be that as it may, we also find that the OIO is silent as to the basis of its conclusion that the e-way bill no 521496456415 which accompanied the goods (as per the departments own document - refer para 5.4 above) was not valid and therefore find that the OIO to this extent is non-speaking and is in complete violation of the principles of natural justice. It fails our understanding as to how, in the absence of any reason proffered by the department for its allegation, the tax payer is expected to counter this allegation. 6.6 We therefore find that the appellants contention that the mandatory requirement of a reasoned and speaking order has been violated is clearly sustained by the facts as narrated above. We find that the OIO has been passed in complete violation of the principles of natural justice and i....
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....y to be generated supporting job work accompanied the consignment. This contention in the OIA has already been analyzed and rejected by us in paras 5.2 to 5.3 above. We therefore find that for the foregoing reasons, the OIA is based on incorrect facts and is not sustainable. 7.5 In view of all of the above, we find that the OIA is liable to be set aside for the reason that it is based on incorrect facts (controverted by the department's own documents) and for relying on irrelevant grounds which are not part of the SCN. 8. We now proceed to discuss the contentions of the learned AR: 8.1 Contention 1: It cannot be said that the goods were "covered" by a valid e-way bill within the meaning of Rule 138 and Section 68, because the document itself affirmatively misrepresents the physical content of the consignment. A zero-quantity e-way bill is not merely deficient - it is, for all practical purposes, no e-way bill at all in respect of the goods actually being transported. 8.2 We find that the contention that the e-way bill is not valid because it misrepresents the physical content of the consignment, is not to be found in the SCN or the OIO. This being the case, we find that....
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....rges plus applicable duties. The value of the original goods on which have been subjected to job work is not includable in the consignment value of the goods which is to be reported in e-way bill. 8.8 In the instant case the goods which belonged to M/s Metalloids India were being returned to them by the job worker M/s Roofstyle Industries, on completion of job work, under cover of job work invoice no 047 of dated 4/5/2023. On scrutiny of the above invoice, it is seen that the invoice value is Rs 1841, inclusive of the Job work charges and the applicable cgst and sgst. In the absence of allegation that the principal and job worker are related or that the amount specified in the invoice is not the sole consideration for the supply, as per the statutory provisions, the transaction value is RS 1841 only which is reflected in the e-way bill 521496456415 dated 4/5/2023 which was tendered on interception of the goods. We find that as per Explanation 2 to Rule 138 of the KGST / CGST Rules, the consignment value of the goods in the instant case is Rs. 1,841 only. This is well below the threshold of Rs 50,000 stipulated in Rule 138(1) for issue of e-way bill. 8.9 In view of the above, ....