Facts of the Case:

In this case, the appellant had sent aluminium colour-coated coils/G.I. sheets to M/s. Roofstyle Industries, a job worker. After completion of job work, the goods were returned to the principal on 04.05.2023. During interception, the department alleged that the goods were not accompanied by valid documents/e-way bill and imposed penalty of ₹2,50,884 under Section 129(3) of the CGST/SGST Acts.

The taxpayer contended that the movement was duly supported by the job-work tax invoice, delivery challan and e-way bill. The job-work invoice reflected only ₹1,841, comprising job-work charges and applicable GST, whereas the value of the principal’s goods was ₹6,96,900. The first appellate authority upheld the penalty.

Issue:

Whether the value of goods belonging to the principal, which are returned by the job worker after completion of job work, is required to be included in the consignment value declared in the e-way bill?

Held That:

The Tribunal held that, when a job worker returns the principal’s goods after completion of job work, the supply is of job-work services, and the transaction value under Section 15 is confined to the job-work charges plus applicable tax. In terms of Explanation 2 to Rule 138, the consignment value for e-way bill purposes is the value determined under Section 15 and declared in the relevant document. Therefore, the original value of the principal’s goods subjected to job work cannot be added to the e-way bill consignment value.

In the present case, the job-work invoice showed a value of ₹1,841, which was also reflected in the e-way bill. Since this value was below the ₹50,000 threshold under Rule 138(1), the Tribunal held that an e-way bill was not mandatorily required for the movement. Consequently, proceedings alleging a defective or absent e-way bill were held to be void ab initio.

The Tribunal further found that the SCN was factually incorrect, as the department’s own documents established that the tax invoice, delivery challan and e-way bill had been produced at the time of interception. The OIO subsequently introduced an allegation regarding the validity of the e-way bill, which was not contained in the SCN and was unsupported by reasons. The Tribunal held that the OIO therefore violated principles of natural justice and was non-speaking.

The appellate authority also relied upon grounds not forming part of the SCN, including an alleged absence of an e-way bill relating to an entirely different movement. Accordingly, the OIA was held to suffer from incorrect facts, irrelevant grounds and non-application of mind and was set aside.

The GSTAT allowed the appeal and set aside the penalty.

Case Name: M/s. Metalloids India, Pathanamthitta vs The Commissioner of State Tax dated 17.09.2026

Citation No. 2026 Taxo.online 2888