Tribunal rules in favor of appellant, Rajasthan Small Industries Corp., overturning recovery charges and penalties.

The Tribunal ruled in favor of the appellant, M/s. Rajasthan Small Industries Corporation Ltd., in a case involving the recovery of outstanding cost recovery charges and the imposition of a penalty under the 2009 Regulations. The Tribunal held that the Commissioner acted unlawfully by ordering the recovery of cost recovery charges under the regulations. Consequently, the Tribunal set aside the orders confirming the demand for outstanding charges and imposing penalties, ultimately annulling them in favor of the appellant.

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Issues Involved:
1. Recovery of outstanding cost recovery charges.
2. Imposition of penalty under the 2009 Regulations.

Detailed Analysis:

Issue 1: Recovery of Outstanding Cost Recovery Charges
The appellant, M/s. Rajasthan Small Industries Corporation Ltd., challenged orders confirming the demand for outstanding cost recovery charges for various periods. The appellant argued that regulations 5(2) and 6(1)(o) of the Handling of Cargo in Customs Area Regulations, 2009 (the 2009 Regulations) do not provide for recovery of such charges. The Tribunal referred to a previous decision in Container Corporation of India vs. Commissioner of Customs, Jodhpur, which held that the adjudicating authority could not order recovery of outstanding cost recovery charges under these regulations. Regulation 5(2) requires the applicant to undertake to bear the cost of customs officers posted on a cost recovery basis, and regulation 6(1)(o) outlines the responsibilities of the Customs Cargo Service Provider, including bearing these costs. However, neither regulation provides a mechanism for recovering unpaid charges.

The Tribunal concluded that the Commissioner committed an illegality by ordering the recovery of cost recovery charges under these provisions. The decision was supported by the Tribunal's previous ruling in M/s. The Thar Dry Port vs. C.C.E. & S.T., Jaipur I, which also held that the Commissioner could not order cost recovery charges under the cited regulations.

Issue 2: Imposition of Penalty
The appellant also contested the imposition of a penalty of Rs. 5,000/- under regulation 12(8) of the 2009 Regulations. The show cause notices issued to the appellant cited contraventions of regulations 5(2) and 6(1)(o) and mentioned the appellant's liability for suspension/revocation of approval and forfeiture of security under regulation 11(1). However, the Commissioner did not revoke the custodianship approval or forfeit the security but confirmed the demand for cost recovery charges and imposed the penalty.

The Tribunal noted that regulation 12(8) allows for a penalty if the Customs Cargo Service Provider contravenes any provisions of the regulations. However, the Tribunal found that the imposition of the penalty was not justified, as the Commissioner had no authority to order the recovery of cost recovery charges under the cited regulations. Consequently, the penalty imposed under regulation 12(8) was also set aside.

Conclusion:
The Tribunal set aside the impugned orders dated 30.10.2018, 17.01.2019, and 29.04.2019 to the extent that they confirmed the demand for outstanding cost recovery charges and imposed penalties. The appeals were allowed, and the orders were annulled to the extent indicated.

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