Commissioner, Central Goods & Services Tax vs. M/S Maharashtra Freight Carriers PVT. LTD.

Held

The High Court held that the Tribunal did not err in setting aside the penalty. The Court found no good ground to interfere with the Tribunal's order. The reasoning was that the noticee, M/s Maharashtra Freight Carriers Pvt. Ltd., was merely a transporter who had transported the goods. The transportation was by a bailee in their capacity as a transporter. The Tribunal had correctly found that the revenue had not led any evidence to establish the transporter's subjective knowledge that the goods being transported were intended to evade tax. Therefore, the appeal lacked merit.

Facts

The revenue filed a defective Central Excise Appeal with a delay of 2 days against an order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad. The CESTAT, by its order dated 06.08.2025, had deleted the penalty imposed on M/s Maharashtra Freight Carriers Pvt. Ltd. under Rule 29 of the Central Excise Rules, 2017. The revenue's appeal was primarily concerned with the deletion of this personal penalty imposed on the transporter for alleged tax evasion.

Key Issues

1. Whether the Hon'ble Tribunal erred in setting aside the personal penalty imposed on persons involved in committing the offence of tax evasion, categorically explained and linked with the facts in the Order in Original, under Rule 29 of the Central Excise Rules, 2017? The revenue argued that the Tribunal erred in setting aside the penalty imposed under Rule 29 of the Central Excise Rules, 2017, on persons involved in tax evasion. The revenue's contention was that the penalty was justified based on the facts presented in the Order in Original. The judgment does not record any specific arguments from the respondent (M/s Maharashtra Freight Carriers Pvt. Ltd.).