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TMI Blog2024 (6) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the corrigendum dated 22 December 2020 passed by State GST Authority under Section 129 (1) of the Maharashtra Goods and Services Tax Act, 2017 (hereinafter "MGST Act") levying penalty with regard to three consignments not being accompanied with e-way bill. During the course of hearing, the Petitioner has pressed only prayer clause (b). BRIEF UNDISPUTED FACTS : 3. Petitioner imported, at JNPT Port, certain machinery from China which were fully exempted under the Customs Act as well as Integrated Goods and Services Tax Act, 2017 ("IGST Act") since they were covered by the EPCG scheme. Petitioner, thereafter, arranged a transporter to transport the said machinery from the port to its factory at Surat. The vehicle in which the machinery was being transported from port to Surat was intercepted at Palghar in Maharashtra. On interception, it was found that the e-way bill did not accompany the vehicle in which the machinery was transported as mandated by Rule 138 A of the MGST Rules, 2017. However, Bill of Entry accompanying the vehicle contained all the details. 4. The State GST authority issued a notice under the MGST Act for imposition of penalty. Petitioner replied to the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AND CONCLUSION:- 8. The issue which arises in the present Petition, is whether Petitioner is at all liable for penalty and if so, under which limb of Section 129 (1) of the MGST Act, Petitioner is liable for penalty. 9. The relevant provisions of the MGST Act, as existing on the date of interception, i.e., 15th December 2020, reads thus: Section 129 (1):- Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released,- (a) On payment of the applicable tax and penalty equal to one hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty; (b) on payment of the applicable tax and penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own factory at Surat post clearance by the Customs Authorities. There is also no dispute that at the time of interception the machinery and the vehicle were not accompanied by e-way bill as required under Rule 138A of the MGST Rules. It is in the light of these admitted and undisputed facts that we are called upon to adjudicate upon the correct limb of Section 129 (1) of the MGST Act under which penalty is required to be imposed. 11. Section 129 (1) (a) of the MGST Act provides for penalty equal to one hundred per cent of the tax payable on goods detained or seized. The phrase "tax payable" would contemplate that the transaction is liable for tax and on which the tax becomes payable. In the instant case, when the machinery is being transported from JNPT to petitioner's factory after Customs clearance, there is no tax payable under the GST Act. Section 9 of the MGST Act levies tax on all intra-State supplies of goods or services or both and such a tax shall be paid by the taxable person. Section 7 (1) (a) of the MGST Act defines "supply" to include all forms of supply of good or services or both such as sale, transfer, barter, exchange, license, etc made or agreed to be made for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less in case of exempted goods. Admittedly, in the instant case, in so far as Customs duty and IGST is concerned, there is no tax liability at the time of import of machinery by virtue of exemption under Notifications Nos. 16 of 2015 and 18 of 2020 In so far as, post the Customs clearance is concerned, transportation of machinery from the port to its own factory cannot be treated as a "supply" as observed us by above. The phrase "exempt supply" is defined under Section 2(47) of the MGST Act to mean supply of any goods or services or both which attracts nil rate of tax or is exempted from tax under Section 11 or under Section 6 of IGST Act and includes non-taxable supply. Section 2 (78) of the MGST Act defines "non-taxable" supply to mean a supply of goods or services or both which is not leviable to tax under the said Act or under IGST Act. In our view, when a person transports the goods imported, after Customs clearance to his own factory premises then it is a non-taxable supply and would fall within the category of "exempted goods" since no tax as opined earlier is leviable under the Act. In such a scenario, the penalty under the second limb of Section 129 (1) (a) would be levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts that Petitioner had given as security for the issuance of the Bank Guarantees. We are shocked to hear the same. It was the obligation of Petitioner to have continued to renew the Bank Guarantees till the disposal of these Petitions, since based on these Bank Guarantees, the goods were released. Further, we are shocked that Respondent Nos. 2 and 3 also did not insist upon renewal of these Bank Guarantees which would have resulted into a huge loss to the State GST Authority in case the stand of Revenue was upheld and if Revenue had to recover the penalty from Petitioner. It was not only the obligation of Petitioner but also duty of Respondent Nos. 2 and 3 to have assured that the Bank Guarantees were kept alive till disposal of these Petitions. We therefore direct Respondent No. 3 to conduct enquiry, fix the responsibility and take the action against the officers / staffs who were responsible for allowing the Bank Guarantees to have lapsed. At the same time, Petitioner was also not justified in not renewing the Bank Guarantees, and therefore taking a firm view of such an inaction, this Court deems if fit to impose cost of Rs. 15 Lakhs (Rs. 5,00,000/- X 3) on Petitioner to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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