TaxTMI 
TaxTMI 
2017 (12) TMI 676
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....tivity of providing Customs Cargo Service at Mundra Port and the petitioners have been declared as a custom cargo service provider in terms of regulation 2(b) of Handling of Cargo in Customs Areas Regulations, 2009. Since the petitioners provide cargo services at the Mundra port which is managed by the petitioners, the Government of India is required to deploy custom staff at the said port for assessment, levy and collection of taxes. In this petition we are concerned with the liability of the petitioners to pay to the Government of India the charges for deployment of such staff which is referred to as "cost recovery charges". The petitioners in the present petition do not dispute their liability otherwise to pay such charges. It is however, also not in dispute that the Government of India issued a circular dated 10.04.2013 granting exemption to the cargo service providers from payment of cost recovery charges, subject to fulfillment of conditions laid down therein. From the circular, one gathers that a committee of the Chief Commissioners was constituted for identifying the performance benchmarks that would make a particular facility eligible for grant of exemption for the customs....
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....ld be undertaken in April each year and proposals for waiver of cost recovery charges sent to DG, HRD, CBEC by 30th April, DG, HRD, CBEC will process the proposals to ensure the necessary orders for exemption of cost recovery charges and regularization of posts are got issued in a time bound manner." 5. We would peruse the circular more minutely at a later stage. A cursory glance at this stage would demonstrate that the Government of India decided to grant exemption to the cargo service providers from payment of cost recovery charges based on its cargo handling pattern of the recent past. The intention of the Government of India appears to be that at the ports where the handling of the cargo in the recent past has been of a certain minimum turnover, the service provider would not be asked to pay the cost of deployment of the customs staff. If on the other hand the total turnover of the business done at the port is less than the minimum threshold level, it would not be worthwhile for the Government of India to post its officers, bear the salary and waive such salary charges from the cargo service providers. In addition to satisfying these criteria, the person seeking exemption fr....
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....ared all these charges. 8. On 15.12.2015, the Chief Commissioner conveyed to the petitioners that it has been decided to exempt the cost recovery charges for the sanctioned strength of the staff. This was however subject to fulfillment of following conditions: "(a) Exemption from payment of cost recovery charges would be prospective. (b) Further continuance of the exemption shall be made by the CBEC on receipt of a certificate from the respective jurisdictional Commissioner to the effect that the performance of the particular ICD/CFS/Seaport/Diamond Plazas during the preceding year was in accordance with the prescribed benchmark, and (c) In case any ICD/CFS/Seaport/Diamond Plazas falls to maintain performance as per the prescribed benchmark, in any given year, it shall be liable to pay 1.85 times of the cost of the operational post i.e. customs personnel deputed during that year." 9. The petitioners object to the above noted condition (a) under which the exemption from payment of cost recovery charges has been made prospective. In other words, from the date of issuance of the order, the petitioners would not pay the cost recovery charges. However, f....
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....tion list. It was pointed out that such decision was approved by the Supreme Court. 12. On the other hand, learned advocate Shri Sudhir Mehta for the department opposed the petition contending that in terms of circular dated 10.04.2013, grant of exemption from payment of cost recovery charges was subject to fulfillment of certain conditions. First condition was that such exemption would be prospective and the second condition was that no charges should be outstanding. In case of the petitioners, after 01.04.2013, the charges were not paid by the petitioners. Their application was therefore not considered. Only upon payment of charges, the same was granted and the exemption was made prospective. In support of his contentions, counsel relied upon following decisions: I. In case of Mumbai International Airport Private Ltd. v. Union of India reported in 2014 (310) E.L.T. 3 (Bom.), where the Division Bench of the Bombay High Court upheld the authority of the department to levy cost recovery charges. II. In case of Thiru Rani Logistics Pvt. Ltd. v. Dir. General, DGHRD, C. & C.E., New Delhi reported in 2016 (340) E.L.T. 160 (Mad.), where the learned Single Judge of th....
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.... of shipping bills handled by the seaport which would be done within 60 days from the date of the circular. Similar exercise would be undertaken in April of each year. 16. It is not in dispute that in case of the petitioners, the necessary requirements of minimum handling of cargo and shipping bills were satisfied for the sanctioned staff deployed at the port. It is not even the case of the department that looking to the value/volume and number of shipping bills through seaport in last two preceding years, a certain staffing pattern was not justified and that therefore either partially or totally the exemption from payment of cargo handling charges was not justified. This is precisely why the department itself granted to the petitioners the exemption from payment of such charges under the order dated 15.12.2015. If this be so, only question is, did the authorities make a mistake in making such exemption prospective i.e. effective from the date of the order and leaving the earlier period from the date of the application till the date of the order uncovered. 17. In this context, the conditions laid down in clauses (b) and (c) of para 5 would have to be examined. Clause (b) of p....
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....cular or for a period prior to the application for such period i.e. the period under review for exemption. 19. The reference to no cost recovery charges shall be outstanding also has a bearing on this aspect of the matter. If on one hand, the Government of India expects that the custodian should pay up the charges and not be in arrears of such charges, when the application for exemption is being processed, the contention that such exemption even if later on granted, would only be prospective, would be incongruent. On one hand, the custodian would have to, pending finalization of the application for exemption, go on depositing the recurring charges with the Government of India, failing which, he would be stated to be breaching condition contained in clause (c) of para 5 of the circular, and on the other hand when such application is granted, the custodian would be told that no refund can be granted for such charges already deposited since the exemption is always prospective. Grant of exemption from the date of the application, if the application is in order and no delay can be attributed to the petitioners in either making the application or supplying necessary information to the....