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of <h1>Tribunal Upholds Custodian Exemption, Dismisses Revenue Appeals. Establishment Charges Waiver Retroactive.</h1> <h3>C.C. -Jamnagar (prev) Versus Shantilal Multiport Infrastructure Pvt Ltd, M/s JM Baxi & Co., M/s Ruchi Infrastructure Ltd. and M/s Shakti Clearing Agency</h3> C.C. -Jamnagar (prev) Versus Shantilal Multiport Infrastructure Pvt Ltd, M/s JM Baxi & Co., M/s Ruchi Infrastructure Ltd. and M/s Shakti Clearing Agency - ... Issues:- Appeal against dropping of demand of establishment charges- Interpretation of Circular No. 27/2004-Cus dated 06.04.2004- Applicability of waiver of establishment charges- Exemption from cost recovery charges for custodiansAnalysis:1. Appeal against dropping of demand of establishment charges:The case involved four appeals filed by the revenue challenging the dropping of demand of establishment charges upheld in favor of the respondents by the Commissioner (Appeals). The original authority had dropped the proceedings of recovery of Establishment Charges and imposition of penalties on the respondents. The revenue contended that the Commissioner (Appeals) erred in not appreciating the facts of the case and the issue involved. The main question was whether the respondents were required to pay establishment charges.2. Interpretation of Circular No. 27/2004-Cus dated 06.04.2004:The Revenue argued that the respondents, appointed as custodians, were obligated to pay establishment charges as per Circular No. 27/2004-Cus. The Circular specified exemptions for certain categories of custodians. However, it was highlighted that the custodians in this case were appointed before 26.06.2002, falling under the exempted category. The Revenue's contention was that the waiver of establishment charges should not apply retrospectively and that the waiver granted was prospective in nature.3. Applicability of waiver of establishment charges:The Revenue claimed that the waiver of establishment charges, granted by the Commissioner of Customs, was effective from the date of application by the respondents in May/June 2014. They argued that the waiver should not cover the period from 2010-11 to May 2014 when establishment charges were outstanding. The waiver was deemed prospective by the Revenue.4. Exemption from cost recovery charges for custodians:The Tribunal examined Circular No. 13/2009-CUS and Circular No. 27/2004-Cus to determine the applicability of cost recovery charges for custodians. It was established that custodians appointed before 26.06.2002 were exempted from payment of cost recovery charges. As all four respondents were appointed as custodians before the specified date, the Commissioner (Appeals) was deemed correct in extending the benefit of waiver of establishment charges to them.In conclusion, the Tribunal found that the Revenue's appeals were not sustainable based on the exemption granted to custodians appointed before 26.06.2002. The waiver of establishment charges was upheld, and the appeals were dismissed. The cross-objections were also disposed of accordingly.
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