2013 (10) TMI 675 - AT - Customs

Tribunal Rules on Payment of Merchant Overtime Charges: Officers' Duties & Customs Areas Defined

The Tribunal resolved the conflict in opinions regarding the payment of Merchant Overtime Charges (MOT) for services by Central Excise Officers during ... Merchant Overtime Tax Charges (MOT) - whether the Central Excise Officer has discharged his duty in the factory premises of respondent & has functioned as a “Customs Officer”, as such, MOT is leviable? - Held that:- It is an admitted position that stuffing work was done in the factory of respondent under the supervision of jurisdictional Central Range Officer during working hours only. The place of working/supervision was at the factory of the respondent which is at Mayapuri. Respondent has pointed out that as per Notification No.14/2002-CE(NT) dated 08.03.2002 as amended by Notification No.22/2002-CE(NT) dated 04.06.2002, the jurisdiction of Delhi II, Range 26 of Central Excise division-V includes Mayapuri Indl. Area Ph.-II where the factory of respondent is located, the services were rendered by the officer within his range only. The same fell within the jurisdiction of the Central Excise Range Officer who supervised the work. Chapter 13 of the CBEC's Customs Manual deals with “Merchant Overtime Fee” wherein it is provided that if services are rendered by the Customs Officer at a place which is not his normal place of work or a place beyond the Customs area, overtime is levied even during the normal working hours. Thus none of the conditions for levy of MOT is satisfied - Following decision of CCE Vs. M/s. Sigma Corporation India Pvt. Ltd. [2013 (4) TMI 649 - DELHI HIGH COURT] - Decided against Revenue.. Issues:Conflict in opinions recorded by different Division Benches of the Tribunal regarding the requirement for payment of Merchant Overtime Charges (MOT) towards services rendered by Central Excise Officers during working hours, specifically in the context of supervision of boarding of goods exported through containers.Analysis:The judgment addressed a conflict in opinions recorded by different Division Benches of the Tribunal regarding the payment of Merchant Overtime Charges (MOT) for services rendered by Central Excise Officers during working hours. Some Division Benches held that there is no requirement for payment of MOT for services related to supervision of boarding of goods exported through containers, while others expressed a contrary view favoring Revenue. This conflict led to a reference to a Larger Bench to determine the legitimacy of either view based on relevant legal provisions.The judgment discussed the decision of the High Court of Delhi in a related case involving the same issue. The High Court framed a crucial question regarding whether Central Excise Officers discharging duties as Customs Officers in the factory premises of the assessee would be considered as functioning in a 'customs area' under the Customs Act, 1962. The High Court concluded that services rendered by Excise Officers, deemed as Customs Officers, within their jurisdiction during normal working hours fall within the ambit of their duties.The Revenue contended that the judgment of the Delhi High Court should not be followed as it allegedly overlooked key provisions of the Customs Act, 1962, defining 'customs area' and 'customs station.' Revenue argued that the Delhi High Court's interpretation excluded the levy of MOT fee in contradiction to clear regulations, emphasizing the liability to remit MOT fees for customs work performed by Officers beyond customs area at any time.After careful consideration, the Tribunal rejected Revenue's contentions, emphasizing the importance of following the principles delineated by the High Court's judgment when there is no contrary principle from another High Court. The Tribunal highlighted the need for consistency and adherence to established legal principles to avoid uncertainty and normative incoherence. Consequently, based on the decision of the High Court of Delhi, the issue referred to the Larger Bench was deemed resolved, and the reference was rejected.In conclusion, the judgment provided a detailed analysis of the conflicting opinions regarding the payment of MOT for services rendered by Central Excise Officers during working hours. It underscored the significance of following established legal principles and the hierarchy of judicial decisions to ensure consistency and coherence in legal interpretations.