TaxTMI 
TaxTMI 
2020 (3) TMI 494
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....ed therein. 2. A letter bearing F. No. VIII/48-06/CUST(T)/2001-02 dated 05.05.2003 was issued by the Assistant Commissioner of Customs, Bhuj Division, Kandla, to M/s. Goodearth Maritime Limited, Jakhau, allowing them to operate / continue their jetty on payment of Merchant Over Time (MOT) charges as per Customs (Fee for Rendering Services of /Customs officers) Regulations, 1998 whenever they require services of /Customs officers of their jetty till separate posting of Customs staff has been made on Cost Recovery Basis. On the basis of the aforesaid letter, M/s. Goodearth Maritime Limited, Jakhau, was paying MOT charges for the services rendered by the Customs officers at their jetty. 3. A show cause notice bearing No. S/20-18/08-Appg (Gen) dated 20.03.2018 and it's corrigendum/addendum dated 26.02.2019 were issued to the appellant M/s. Goodearth Maritime Limited, Jakhau, who are Customs Cargo Service Provider'' (herein after referred to as ''the CCSP" for the sake of brevity). In the notice, it was contended that as per Regulation 2(b) of the Handling of Cargo in Customs Areas Regulations, 2009 (herein after referred to as 'HCCAR', 2009) in terms of Notification No. 26/2009-C....
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....e provisions of the HCCAR, 2009. However, the CCSP has paid charges amounting to Rs. 18,41,005/- on MOT basis during the period 17.03.2009 to 31.03.2015. 7. In view of the above contention, it was alleged that the CCSP have not paid the cost recovery charges for the Customs staff posted at their private jetty, during the period 17.03.2009 to 31.03.2015, and hence, the CCSP being Custodian has contravened the provisions/conditions of the Notification No. 09/2002 dated 23.04.2002 read with Regulation 6(1)(o) of HCCAR, 2009, by not paying the Cost Recovery charges for the Customs Staff posted at the said jetty and thus their Custodianship is found liable to suspension / revocation. Further, the CCSP is also found liable to penalty in terms of Regulation 12 (8) of HCCAR, 2009. The Adjudicating Authority vide impugned order dated 19.03.2019 confirmed charges raised in the show cause notice and passed the following order:- (i) I hereby order for recovery of Cost Recovery Charges of Rs. 1,45,55,246/- (Rupees One Crore Forty Five Lakh Fifty Five Thousand Two Hundred Forty Six) for the period 17.03.2009 to 31.03.2015 from M/s. Goodearth Maritime Limited. As the custodian has pai....
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.... according to which the appellant was liable to pay only MOT charges and not Cost Recovery charges. The appellant have regularly paid the MOT charges which is not disputed. He submits that cost recovery charges at a specified rate are levied for the postings of customs officials additionally sanctioned over and above regular posts. In the present case, no posting of Customs official additionally sanctioned over and above regular posts were made. Therefore, on this ground, the appellant is not required to pay cost recovery charges. He further submits that since the appellant was notified as custodian under Section 45 of the Customs Act on 23.04.2002, i.e. prior to dated 26.06.2002, therefore guidelines under Regulations, 2009 is not applicable in the light of Board Circular No. 04/2011-Cus dated 10.01.2011. Accordingly, the appellant had correctly paid MOT charges under intimation to the department during the period 17.03.2009 to 31.03.2014. He further submits that even the appellant had requested the department to furnish a list of officers exclusively for Customs House, Jakhau but the department failed to provide the same. In view of this, it is clear that no dedicated posting of ....
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.... 4 of HCCAR, 2009 which has given retrospective effect of this regulation. Therefore, for the past period also, in terms of Regulation 5(2) read with Regulation 6(o), the appellant is required to pay cost recovery charges. He submits that due to retrospective effect of HCCAR, 2009 all the reliance made by the appellant on the earlier circulars and clarifications will be of no help to the appellant. He placed reliance on the following judgments:- (a) 2018 (364) ELT 59 (Del) - Allied lCD Services Limited vs. Union of India (b) 2017 (357) ELT 236 (Tri-Del) - Rajasthan Small Industries Corpn Limited vs. CCE, Jaipur-I (c) 2017 (358) ELT 1131 (Tri-Mum) - Savita Polymers Limited vs. CCE, Raigad (d) 201A (310) ELT 3 (Bom) - Mumbai International Airport P. Limited vs. Union of India (e) 2011 (267) ELT 319 (Mad) - Hari CFS vs. Union of India 10. We have heard both sides and perused the record. The limited issue to be decided is whether the appellant is required to pay cost recovery charges in terms of HCCAR 2009 or payment of MOT charges made by the appellant is correct. In the present case, the fact is not in dispute that the appellant was all....
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....appellant's Jetty. Therefore Rule 5(2) and Rule 6(o) is not applicable in case of the appellant. Moreover, the appellant have been paying MOT charges as per the authority of the department i.e. letter dated 05.05.2009 issued by the Assistant Commissioner, Customs Bhuj Division. 11. As regard the Contention of the Adjudicating Authority that CCAR is having retrospective effect, we find that on careful reading of Rule 4 which gives retrospective effect, we find that the said provision is only to regularize the appointment of Customs Cargo service providers which have been given license prior to issue of this Regulation HCCAR 2009. Therefore, this regulation cannot be applied retrospectively for cost recovery charges, particularly when no separate officer was posted. Moreover, as discussed above, even by any stretch of imagination, HCCAR 2009 in respect of cost recovery charges is made applicable retrospectively, even than cost recovery charges cannot be recovered in terms of rule 5(2) read with Rule 6(o) unless separate officer is posted. Therefore, under any circumstances, in the facts of the present case, the demand of cost recovery charges is not sustainable. 12. In the case....
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....rgo and also the collection of proper duty thereon. Appointment of an airport under Section 7 as a customs airport and appointment under Section 45 of a person as a custodian, both are obviously a one-time affair. Since the very nature of appointment partakes with it, the power to regulate subsequently any such appointment as customs airport or entrustment of the custodial services can also be recalled at any time later on for valid reasons. Therefore, it could be legitimate to expect the appointee under Section 7 and as well as the custodian under Section 45 to pay for a fees prescribed for appointment as such. A look at Section 141 of the Act in no uncertain terms makes the position clear that all conveyances and goods in a customs area shall be subject to the control of the officers of the customs for purposes of enforcing the provisions of the Act. Otherwise, it might possibly lead to easy evasion of the levy liable to be applied on them. Sub-section (2) of Section 141 makes it explicitly clear that the imported or export goods may be received, stored, delivered, dispatched or otherwise handled in a customs area in such manner as may be prescribed and the responsibilities of pe....
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....o be kept in mind is that, such regulations can only be made for such purposes which are intended to be carried out under the Act and not otherwise. 10. Then, it takes us to understand the general purposes for which this special piece of legislation was enacted. It is not merely intended for purposes of garnering revenue to the State by levying duty on imports and exports. The invisible roots of this legislation lie in the State's primary obligation to nurture and protect the indigenous industrial sector from facing or measuring up to international standards and unhealthy competition. Further, India cannot be a "free for all dumping yard". Otherwise giant multinational corporations would not allow sun to shine on our local corporations and consequently continue to exploit the local conditions and turn them in their favour. More importantly the natural resources of this nation move away across it's borders, for the good and welfare of others and they will scarcely become available for securing the wellbeing of our countrymen. The very foundations upon which this nation won its freedom would have been quickly weakened, otherwise. 11. Regulation 5(2) of Regulations, ....
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....ases 217 at 227] in the following illustrious words : "It is trite law that his Majesty's subjects are free, if they can, to make their own arrangements so that their cases may fall outside the scope of the taxing Acts. They incur no legal penalties and, strictly speaking, no moral censure if, having considered the lines drawn by the Legislature for the imposition of taxes, they make it their business to walk outside them." 14. However the limits of the right of the public authority to impose taxes lies with the Legislature, as taxation is the very prerogative of the Legislature. Hence the right to impose taxes and to determine the circumstances under which these will be done is the very privilege of the legislative power while mere administration of such a taxation statute is the responsibility of the executive power of the State. It is a common legislative practice to prescribe for the legislative policy broadly in the statute and then leave the guidelines for working out the details effectively behind the said legislative policy by delegating the power to frame rules or regulations, as the case may be. This practice of empowering the executive to make supportin....
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....nd Act, 1952 : "9. ................The neat and terse definition of tax which has been given by Latham, C. J., in Matthews v. Chicory Marketing Board (1) is often cited as a classic on this subject. "A tax", said Latham, C. J., "is a compulsory exaction of money by public authority for public purposes enforceable by law, and is not payment for services rendered". In bringing out the essential features of a tax this definition also assists in distinguishing a tax from a fee. It is true that between a tax and a fee there is no generic difference. Both are compulsory exactions of money. By public authorities; but whereas a tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. If specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area, and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of pe....
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.... such powers and confine their activity in strict conformity of the terms of their derived authority. 16. It was, therefore, appropriate to decipher as to whether any service either special or even ordinary can be said to be rendered by the respondents to the petitioner for them to justify the levy. With the expansion or advent of quality infrastructural inputs such as roads, highways network, etc., rapid industrialization and manifold increase of commercial activities can be expected as the most inevitable corollary. Industrialization and increased commercial activities can lead to increase of import and export activity. Both imports and exports of goods are subject to levy of duty. Thus, in the process, the State's revenue gets augmented, apart from increased economic activity and development of human resources. The increase in the quantum of imports and exports therefore has a direct proportionate impact upon the revenue garnering and overall development. As was already noticed supra, appointment of a custodian of the customs space identified under Section 8 of the Act is only for ensuring the integrity of such a place so that no revenue loss and duty evasion occurs the....
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....ourt in the case of Gupta Modern Breweries v. State of Jammu and Kashmir *(2007) 6 SCC 317+." 18. There is one other reason why a fee cannot be collected from the custodian clearing the goods which are either imported or meant for export. Clearing the international passengers or goods, imported or meant for export is a sovereign function of the State. For purposes of effective and efficient discharge of these functions, the custodian is required to provide the necessary infrastructural facilities. Sans such facilities, the customs clearance duties become imminently impaired. Therefore, while a demand for making available standard infrastructural facilities for facilitating efficient discharge of customs clearance functions is legitimate, but however, demand of reimbursement of cost recovery is totally unjust. There is yet another reason while preparing the appropriation estimates of revenue, adequate provision is always made towards the "Head of salaries and allowances" payable to the Government servants functioning under various Ministries/Departments. Such appropriations are placed for consideration and approval of the Parliament/Legislature of the State as the case may ....