GST – Transportation of imported machinery from JNPT to own factory is not “supply”
The petitioner imported certain machinery from China under EPCG scheme. It was fully exempted from Customs Act and Integrated GST Act, 2017.
It was found that E-way bill did not accompany the vehicle transporting the exempted machinery from JNPT to Surat intercepted at Palghar. However, Bill of Entry containing all details was with the vehicle.
State GST authority imposed in all penalty of Rs.44,38,228/- equivalent to tax on the valuable of the machinery.
HELD that the transport of machinery from JNPT to the petitioner’s own factory would not fall within the scope of “supply” under Section 7 of the MGST Act and therefore, charging section 9 is not attracted to pay any tax. Therefore, the first limb of section 129(1)(a) providing penalty equal to 100% of payable tax cannot be invoked. However, the petitioners are liable to pay penalty of Rs.25,000/- only for the exempted goods.
In this case, the petitioners had given bank guarantee for release of goods during the pendency of the writ petitions. However, at the inclusion of hearing it was found that the said BG were not renewed nor the Authority informed the petitioners to renew the same. Moreover, the Bank had also returned FDR given for issuance of BG. This would have resulted if the stand of Revenue was upheld and it had to recover the penalty. It is, therefore, directed to conduct inquiry and fix responsibility on the officers / staffs and also imposed cost of Rs.15 lakhs (three petitions) to be paid by the petitioner to PM Care fund.
Section 138A of the Maharashtra GST Rules, 2017.
Judgment dated 21.6.2024 of the Bombay High Court in Writ Petition No.2611 of 2021 of Fabricship Pvt Ltd Vs. Union of India and others with connected writ petitions.
