The Allahabad High Court upheld a penalty against Nippon Tubes Limited for failing to issue the necessary delivery challan and e-way bill during the transportation of goods intended for job work. The case arose when Nippon Tubes purchased four HR coils from SAIL, Ghaziabad, allocating two for its own use and two for a job worker. However, an e-way bill was only generated for the coils intended for Nippon Tubes' own manufacturing unit.
The vehicle transporting the coils was intercepted after delivering the goods to the job worker, leading to the detention of the goods under Section 129(3) of the CGST/UPGST Act. Nippon Tubes' subsequent appeal was dismissed. The central issue was whether the penalty under Section 129(3) was justified due to the absence of a delivery challan or e-way bill for the goods moved to the job worker.
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The court, referencing Rule 45 and Rule 55 of the CGST Rules, emphasized the necessity of both a delivery challan and an e-way bill for the movement of goods to a job worker. Given the lack of these documents, the authorities were deemed to have acted within their jurisdiction in detaining and penalizing the goods. The court's decision was supported by precedent from M/s Famus India v. State of U.P., which underscores the importance of strict compliance with documentation rules. Consequently, the petition was dismissed, and the penalty was upheld as legally valid.
Order date: 17 Sept 2025
Parties: Nippon Tubes Limited v. State of U.P. & Ors.
Facts -
- Petitioner purchased four HR coils from SAIL, Ghaziabad—two for its own unit and two for a job worker.
- E-way bill was generated only for coils meant for petitioner’s manufacturing unit.
- Vehicle was intercepted after dropping coils at job worker’s premises; authorities detained goods under Section 129(3) of CGST/UPGST Act. The Appeal filed by petitioner was dismissed.
Issue -
- Whether penalty under Section 129(3) is justified when goods are moved to a job worker without a delivery challan or e-way bill?
Order -
- The single bench of the Hon’ble High Court noted that Rule 45 and Rule 55 of the CGST Rules require both a delivery challan and e-way bill for movement of goods to a job worker.
- Since no such documents accompanied the goods, the authorities acted within jurisdiction in detaining and penalising.
- Reliance placed on M/s Famus India v. State of U.P. confirming strict adherence to documentation rules.
- Petition was dismissed; penalty sustained as legally valid.
