Order date: 24.04.2025
Parties: MARCOWAGON RETAIL PVT. LTD. & ANR.  Vs  UNION OF INDIA & ORS.

Facts –

• The petitioner engaged in exporting goods like sports related apparels and accessories on 28/08/2024. The goods were dispatched from Gurugram on 29/10/2024. The petitioners duly generated e-invoice as well as e-way bill for the transactions.
• It was a case of the petitioners that there was a break-down of a vehicle and due to Diwali Festival during the said period, the delivery could not be completed within the time as mentioned in the e-way bill which was valid up to 04/11/2024.
• However, the respondent passed an impugned order dated 19/11/2024 in Form GST-MOV-9 rejecting the submissions of the petitioners and confirming the demand of penalty at the rate of 200% of tax leviable on the goods which were meant for export.

Issue –

• Whether penalty could have been levied under Section 129(1)(a) of the Act as no tax was payable on the zero rated supply as per the provisions of Section 16 of the Integrated Goods and Services Tax Act, 2017?

Order –

• The division bench of the Hon’ble High court relied on its earlier decision in M/s Boron Rubber India (supra) in a situation similar to the present case when the goods were supplied for job work and there was contravention of Rule 138 attracting penalty under Section 129 in absence of any tax payable considered such supply akin to exempted goods for tax payable as a nil rate and the petitioner was subjected to penalty of Rs.25,000/-.
• As the petitioners have suppressed the relevant facts of placing the order through its sister concerns which was subsequently sought to be amended is also not appreciated and the petitioners are also liable to pay cost of Rs.10,000/- for each petition to the respondents for such suppression.