Is MOT payable when the

[Guest]

We are registered as “Custodians” under the provisions of Section 45 of the Customs Act 1962 read with the provisions of “Handling of Cargo in Customs Area Regulation 2009”. We have our own private jetty. The Customs officers are deployed on Cost Recovery basis. We import our raw materials from foreign countries through sea route on payment of applicable Customs duty. We also procure raw materials, which are exempt from Customs duty, from domestic suppliers through sea route. We export our finished pro0duct through sea routes also using our jetty. The customs officers insist on payment of Merchant Overtime (MOT) both while importing and exporting and also on coastal cargo. As per our understanding Merchant overtime is not required to be paid when customs officers are deputed on “Cost Recovery” basis. We would like to have your valuable views as to whether the demand of Merchant overtime by customs officers is legal?

[PAWAN KUMAR]

Only one option is exercised. if you agreed to hired on cost recovery basis, MOT will not required to be paid, for reference you will take customs circular No 31/2003-Customs issued for administrative control over EOU under the customs act 1962.

[YAGAY andSUN]

MOT charges will not be applicable if the services being provided within working hours of the concerned authorities.

[Guest]

Thanks for reply. However we are not covered by circular No 31/2003 since we are neither EOU/EHTP/STP unit. We are registered as "Custodians" under the provisions of Section 45 of the Customs Act 1962 read with the provisions of “Handling of Cargo in Customs Area Regulation 2009”

[PAWAN KUMAR]

However you are not EOU but  these provisions shall mutatis mutandis apply to all similar transactions pertains to MOT or Cost basis. 

AI Summary

Merchant overtime: not payable where customs staff are engaged on a cost recovery basis or during normal working hours. Whether Merchant Overtime is payable when customs officers are deployed on a cost recovery basis for a private custodian's jetty: respondents state MOT is not payable where officers are hired on cost recovery or where services are provided within normal working hours; a cited circular addressing administrative control over certain units does not formally cover custodians but may be applied mutatis mutandis to similar MOT or cost recovery arrangements.