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2021 (2) TMI 705 - Commissioner - GSTClandestine manufacture and removal - excess stock of Perfume/Compound found in the residential premises - seizure and detention of excess found goods - Confiscation - HELD THAT:- It is found that on being asked by the officers of DGGI regarding documents pertaining to excess stock of perfume/compound found in his residence, Sh. Ashok Agarwal, Director of M/s. MPPL, Jaipur stated that the said perfume/compound were lying at his residence premise is pertained to M/s. MPPL, Jaipur and was kept to maintain the secrecy of their technical know-how of the product as they had to carry out certain process of blending perfume/compound in his residence premises since last one year. During the statement of Sh. Ashok Agarwal, Director of M/s. MPPL, Jaipur all seized records were shown to find out the relevant invoices of seized perfume/compound but he replied that he was unable to find out the relevant records of perfume/compound, seized by the officers of DGGI under panchanama dated 10/11-11-2017. Further, he had stated that they had purchased perfume/compound from M/s. Gupta & Company, Delhi and M/s. Kelkar & Company. Regarding excess/unaccounted stock of perfume/compound valued at ₹ 15,79,200/- found unaccounted during search on 10-11-2017, no plausible explanation regarding their procurement/non-accountal of the same in their records/books of account was put forward by the appellant neither during the time of search nor afterwards. Sh. Ashok Agarwal, Director of the appellant company who was looking after the day-to-day affairs of the company and also personally supervised daily activities also admitted the unaccounted stock of perfume/compound and agreed to pay the applicable tax. Further, he has abetted and assisted the clandestine manufacture and removal of taxable goods by acquiring possession, removing, depositing, keeping, concealing and dealing in goods which he knew were liable to confiscation. The appellants have acted intentionally in order to avoid payment of CGST/SGST and did not maintain proper record of the stock of raw material perfume/compound found excess stored in their residence premises, as required under Rule 56 of the CGST Rules, 2017. Further, they did not file monthly/periodically return in respect of the said goods procured and stored in their factory premises as required under the law. They did not maintain stock details of the aforesaid goods in the stock register and did not file monthly GSTR-1 and GSTR-3B returns which also shows that these perfume/compound were procured without any valid documents and intended for manufacture of finished goods to be cleared without payment of tax and the finished goods were intended for clandestine removal without payment of Tax. The appellants were required to comply the provisions of law and to follow the procedure as prescribed under CGST Act/Rules but the appellants have completely failed to do so. Therefore, the goods found in excess/unaccounted were liable for confiscation under Section 130 of the CGST Act, 2017 read with Rule 139 of CGST Rules, 2017 and read with Section 130 of the Rajasthan GST Act, 2017 and the appellants were also liable for penal action under Section 122(1)(xvi) and (xviii)/125 of the CGST Act, 2017 and the Rajasthan GST Act, 2017 - Sh. Ashok Agarwal, Director of the Company was responsible for day-to-day affairs of the company had consciously and deliberately indulged in activities of clandestine manufacture and clearance/supply of taxable goods. Therefore, he is also liable to penalty under Section 122(3)/125 of the CGST Act, 2017. The reliance placed by the appellants in their defence is squarely not applicable in the instant case. Appeal dismissed.
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