Cost recovery waiver cannot be denied by adding an extraneous sanction-of-posts condition when benchmark requirements are met.

Where a circular grants waiver of cost recovery charges upon satisfaction of specified operational benchmarks, the administration cannot add a further condition that waiver depends on later sanction of posts. The Court treated the sanction order as an internal administrative arrangement, not a condition precedent, because the petitioner's CFS had already met the prescribed benchmark for two consecutive years. Denial of the waiver on that ground was held arbitrary and inconsistent with the object of the circular. The petitioner was therefore entitled to waiver with effect from 01.07.2019, and amounts recovered thereafter were liable to be refunded.

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Issues: Whether the petitioner was entitled to waiver of cost recovery charges under the circular dated 12.09.2005 from 01.07.2019 on fulfilment of the prescribed benchmark, and whether the denial of waiver on the ground that the posts were sanctioned only later was sustainable.

Analysis: The petitioner's CFS had been operating and the prescribed benchmark for two consecutive years had been achieved by handling more than 1200 containers and more than 1200 bills of entry or shipping bills per annum. The circular dated 12.09.2005 contemplated regularisation and waiver once the benchmark and operational requirements were met. The Court found that the respondents' insistence that waiver could be considered only after the sanction order dated 18.03.2020 introduced an additional condition not found in the circular. The sanction of posts was treated as an internal administrative arrangement and not a condition precedent for waiver. The denial of exemption on that basis was held to have no nexus with the object of the circular and was arbitrary.

Conclusion: The petitioner was entitled to waiver of cost recovery charges with effect from 01.07.2019, and the amounts recovered thereafter were liable to be refunded.

Ratio Decidendi: Where a circular grants waiver of cost recovery charges on fulfilment of specified operational benchmarks, the administration cannot deny the benefit by adding an extraneous condition that the waiver depends on a later sanction of posts, if such sanction is only an internal arrangement and the benchmark conditions are otherwise satisfied.

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