Cost recovery charges for customs officers upheld where custodian accepted liability and no exemption applied.

A custodian operating a Container Freight Station was required to bear cost recovery charges for customs officers deployed under the customs regime, because the governing 2009 regulations and the applicable public notice imposed that obligation and no specific exemption was shown. The challenge that the posts were not formally sanctioned failed where customs supervision and deployment had in fact occurred, and later departmental absorption of the posts did not extinguish the liability. The Court also treated the dispute as barred by estoppel, acquiescence and res judicata in light of earlier proceedings, and upheld the consequential restriction on cargo movement imposed for persistent default.

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Issues: Whether the petitioner was liable to pay cost recovery charges for customs officers deployed at the Container Freight Station and whether the demand notices and consequential restriction on movement of cargo were valid.

Analysis: The petitioner had accepted appointment as custodian under the Customs Act and the governing public notice expressly required it to bear the cost of customs officers posted on cost recovery basis. The regulatory scheme under the Handling of Cargo in Customs Areas Regulations, 2009 required payment of such charges unless specifically exempted, and the petitioner's earlier remittance of charges and later application for waiver showed acknowledgement of liability. The Court held that liability was not defeated by the argument that posts were not formally sanctioned, since the material showed customs supervision and deployment in fact, and the later subsuming of posts in the departmental cadre did not extinguish the obligation. The Court also found the challenge barred by estoppel, acquiescence and res judicata in view of the earlier Delhi High Court proceedings, and held that the operational restriction imposed for persistent default was a lawful consequential measure.

Conclusion: The petitioner was held liable to pay the cost recovery charges, and the demand notices as well as the restriction on movement of cargo were upheld.

Ratio Decidendi: A custodian that accepts appointment and operates under a customs regime requiring payment of cost recovery charges cannot avoid liability by disputing internal sanction of posts where customs services were in fact rendered and no specific exemption was granted; prior adjudication and conduct may also bar re-litigation of the liability.

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