TaxTMI 
TaxTMI 
2020 (9) TMI 1006
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....urt in Allied ICD Services Ltd. Vs. Union of India and Ors., 2018 SCC OnLine Del 10816:(2018) 364 ELT 59, wherein the impugned provision has been upheld. The said judgment is now pending challenge by way of a Special Leave Petition before the Supreme Court, however there is no stay against the same. The only remaining prayer in the present petition that merits consideration is the one that has been made in the alternative, impugning the demand raised by the respondents for recovery of CRC of customs employees posted at the Petitioner's station. Brief facts: 2. The factual background giving rise to the present petition is that pursuant to a policy decision taken vide Circular No.128/95-Cus dated 14.12.1995, the appointment of custodians of ICDs/CFSs/ACCs/EPZs was opened to the private sector and standard guidelines were issued in this regard, with the aim to de-congest ports and establish custom clearance facility in the interior parts of the country. The ICDs/CFSs/ACCs/EPZs so established were to function akin any other port and their operators were appointed as custodians under Section 45 of the Customs Act, 1962.The above-referred 1995 Circular provided, inter alia, that custod....
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....uested to provide the information as per enclosure in respect ICDs/CFSs falling under your. It may also be ensured that in respect of ICD/CFS for which regularization of posts are suggested, no cost recovery charges are under dispute or pending payment as on 31st August, 2005. 4. xxxx Yours sincerely, Sd/- (Anupam Prakash) Under Secretary to the Government of India" Enclosure: as above. 5. On 17.03.2009, the Department of Revenue notified the Handling of Cargo in Customs Areas Regulations, 2009. Regulation 5(2) of the same reads as under: "5. Conditions to be fulfilled by an applicant for custody and handling of imported or export goods in a customs area. - (1) X X X X (2) The applicant shall undertake to bear the cost of the Customs officers posted, at such customs area, on cost recovery basis, by the Commissioner and shall make payments at such rates and in the manner prescribed, unless specifically exempted by an order of the Government of India in the Ministry of Finance;" 6. This was followed by a Circular dated 23.03.2009 through which the Handling of Cargo in Customs Areas Regulations, 2009were brought into effect. The said Circular....
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....mmunication was issued by the DGHRD whereby, as a one-time measure, waiver of CRC was granted to eligible facilities under certain circumstances as specified therein, and the Directorate General of Human Resource Development [hereinafter referred to as 'DGHRD'] was authorized to deal with the request for waiver of CRC. It also provided that the conditions for grant of waiver shall be the same as provided in the Exemption Circular. The said communication dated 03.11.2015 read as under: "Directorate General of Human Resource Development Customs & Central Excise Expenditure Management Wing C-4, Ircon Building, District Centre, Saket, New Delhi 110017 F.No.8/B/28/HRD(EMC)/CRB/2014 pt. Date: 03.11.2015 To The Chief Commissioner of Central Excise (All) The Chief Commissioner of Customs (All), and The Chief Commissioner of Customs (Preventive) (All) Sub:- Waiver from the payment of cost recovery charge in respect of ICDs/CFSs, Seaports, Air Cargo Complexes, Courier Terminals, Diamond Plazas, etc.- reg. Madam/Sir, Issue of waiver from payment of cost recovery charge in respect of ICDs/ CFSs, Seaports, Air Cargo Complexes, Courier Terminals, Diamond Plazas, etc. wa....
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....esh K. Mathur) Assistant Director" 9. Vide letter dated 18.02.2016 [hereinafter referred to as 'the impugned letter'], the Additional Commissioner of Customs rejected petitioner's request for waiver, on the ground that the petitioner did not meet the eligibility criteria, in terms of the Exemption Circular. The letter dated 18.02.2016 is quoted below: "Government of India Office of the Chief Commissioner of Customs, Kolkata Zone 15/1, Strand Road, Customs House, Kolkata-700001 Telephone No. (033) 2242-1173, Fax No.(033) 2231-3289, E-mail: xxxxxxxx F. No. I(16)-05/CCC/KOL/2016/3322 Date:18/02/2016 To, M/s. Apeejay Infralogistics Pvt. Ltd., Xxxx Xxxx Sir, Subject: Waiver from the payment of cost recovery charge in respect of ICDs/CFSs-reg. In pursuance of DGHRD, New Delhi's letter under F.No.8/B/28/HRD(EMC)/CRB/2014 pt. dated 03.11.2015, this office has initiated a process for waiver from the payment of cost recovery charge in respect of eligible ICD/CFSs. As per records, the year wise workload handled by you is asunder: Financial year No.of TEUs No.of BE/SB processed 2013-14 5709 612 2014-15 5218 602 2015-16 (upto November'15) 3126 284 ....
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...., Mr. Bansal, learned Senior Standing Counsel for respondents No.3 and 4 submitted before the court that now, only the Prayer 'D' : "In the alternative and without prejudice, issue writ in the nature of certiorari or any other form as considered proper by this Hon'ble Court, quashing the letter dated 18.02.2016, whereby the Respondent has refused to waive cost recovery of custom staff posted at CFS Haldia, West Bengal contrary to letter dated 03.11.2015 issued by Director General of Human Resource Development read with circular dated letter dated 12.09.2005 issued Respondent No. 1 " (sic) required consideration. This contention was recorded in the proceedings dated 21.01.2019. 16. Later, when the present petition came up for final hearing, a question arose regarding interpretation of one of the clauses of the Exemption Circular that stipulated that the waiver was a one-time measure. Petitioner contended that the waiver of CRC was being granted to the eligible entities, till date. Mr. Bansal, learned Senior Standing Counsel for the Revenue, upon instructions from Respondents 3 and 4, clarified, that the Exemption Circular and the letter dated 03.11.2015, issued by the DGHRD for gra....
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....on simultaneous satisfaction of both the preconditions as mentioned in clause 1(ii) and (iii) is contrary to the object of the exemption circular. The Exemption Circular was issued to ensure that after the initial period of two years, the petitioner would get a waiver of CRC (incurred on account of the customs staff) on the basis of the performance benchmark prescribed in Clause 1(ii). The petitioner had accomplished the said requirement, and handled TEUs > 1200, consistently for all the years from 2013 to 2020. To validate this claim, Mr. Krishnan relied upon the figures tabulated below: Financial Year Criteria in terms of Regulation Actual TEUs handled by the Petitioner 2013-2014 1200 TEUs 5621 TEUs 2014-2015 1200 TEUs 5218 TEUs 2015-2016 1200 TEUs 4203 TEUs 2016-2017 1200 TEUs 3219 TEUs 2017-2018 1200 TEUs 2368 TEUs 2018-2019 1200 TEUs 2355 TEUs 2019-2020 1200 TEUs 3497 TEUs 2020-2021 (April & May 2020) 1200 TEUs 1892 TEUs 19. Mr. Krishnan contended that since the regulatory criterion of handling of >1200 TEUs for each Financial Year, as prescribed in the Exemption Circular, had been duly met, the Petitioner should get the waiver of CRC, irrespective ....
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....ions in Clause 1 that not just one, but both the conditions have to be satisfied concurrently, in order to be eligible to claim waiver. He claimed that the petitioner was well aware of these conditions before they applied for setting up of the CFS. Since the workload data exhibits that petitioner had fulfilled only one of the criterion i. e. the required number of TEUs, it is not eligible for grant of exemption. Mr. Bansal also referred to a certain file noting of the Ministry of Finance [hereinafter referred to as 'MoF'] submitted before this Court vide affidavit dated 22.07.2019 which records the discussion on the said Circular. He submitted that the said file noting clearly suggests that the conditions regarding number of containers and number of documents have to be satisfied simultaneously. Besides, he also submitted that the exemption circulars have to be strictly construed in order to claim benefit thereunder. Petitioner's proposition is contrary to the settled position in law relating to interpretation of exemption notifications. 22. In rejoinder thereto, Mr. Krishnan rebutted the contentions of Mr. Bansal and submitted that the Exemption Circular does not state that all c....
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....ption from recovery of CRC has been dealt with in clauses 5.3 and 5.5 (extracted supra). These three documents form the core of the issue in the present case. 25. A bare reading of the Exemption Circular makes it amply clear that in order to avail the benefit of exemption/waiver from payment of CRC, the CFS has to fulfil certain conditions laid down therein, which are based on achievement of prescribed performance benchmark. These conditions along with benchmarks are enumerated as under: (i) No. of containers handled by ICD : 7200 TEUs per annum. (ii) No. of containers handled by CFS : 1200 TEUs per annum. (iii) No. of BE or SB purchased by ICUs / CFSs : 7200 per annum for ICDs and 1200 for CFSs. (iv) Bench mark at (1) to (3) shall be reduced by 50% for those ICDs/CFSs exclusively dealing with exports, as per staffing norms. 26. The evaluation of the performance of the Petitioner is based primarily upon two criteria: firstly, on the number of containers/TEUs handled by CFS as given in Clause 1 (ii), and secondly, on the number of BoE/SB processed by CFS as given in Clause 1 (iii).The simple question that hinges before us is whether thes....
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....sideration cumulatively in order to be eligible to claim exemption or waiver of CRC. In our view, the benchmarking is evaluated both on the basis of number of containers handled by ICD/CFS, as well as the number of BoE/SB processed, and both these conditions need to be satisfied simultaneously and not just one of them in order to be eligible to claim waiver from the payment of CRC. 30. Both criteria envisage different parameters of performance by an ICD/CFS operator. Clause 1 (ii) envisaged number of and volume of goods handled (container/TEUs), whereas, Clause 1 (iii) envisaged the number of documents and volume of business handled. As pointed out by Mr. Bansal, there can be a situation where a document (BoE/SB) may contain goods that require more than one container, but conversely, there can also be an eventuality where a container may contain goods that are subject matter of more than one document. This would largely depend on the nature of goods. Thus, there can be a situation when there would be no correlation between the two. Mr. Bansal has further explained that a container is provided by the shipping line and it is for them to determine how to extract them. He submits that....
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....s and 1200 for CFSs. viii) Bench mark at (1) to (3) shall be reduced by 50% for those ICDs/CFSs exclusively dealing with exports, as per staffing norms. 5. The sub-group expressed that number of containers handled by ICSs/CFS and the documents processed should be simultaneously satisfied to justify the regularization of posts." 32. According to the petitioner's written rejoinder submissions, the rationale behind such incentivization was to promote the import/export of goods, to encourage business efficacy by targeting increase in actual business of importing/exporting of TEUs, and not the quantum of paper-work required for the same. Firstly, we must point out that this is an inference of the Petitioner which lacks material foundation. Secondly, this argument is wholly misconceived and self-contradictory. We cannot interpret business efficacy in the manner that the Petitioner contends. We also cannot agree with the Petitioner's rationale that actual business is only TEUs, and not the documents i.e. BoE/SB, or that efficacy will always be achieved when more TEUs are imported/exported in one BoE/SB, and not when the same TEU is imported/exported through multiple BoEs/SBs. If we a....
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....r absurdity, would the occasion arise for interpretation for the court. In the present case, we find that the threshold requirement for venturing into the arena of interpretation by applying the suggested principle of harmonious construction is not met. 34. We also find the emphasis on the comma punctuation mark (,) used in Clause 5.5 of the Circular dated 23.03.2009 to be misdirected. The stress given to this separator is entirely out of context. The surrounding words both preceding and succeeding the comma have to be read together to give a complete meaning. The complete sentence reads as-"These norms include parameters such as the total number of import or export containers handled, the customs declarations filed for import or export, etc" The sentence expressly uses the expression "such as", and then mentions some of the parameters by way of illustration or example, separated with the use of a comma, and followed by the word 'etc'. This makes it clear that the comma has been merely used to separate the descriptive parameters, which are being mentioned inclusively. It is also obvious that these are a few of the parameters, which have been illustrated, and there may be more. All....