TaxTMI 
TaxTMI 
2019 (7) TMI 1788
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....urity. 2. Customs Appeal No. 51280 of 2019 has been filed by M/s Jaipur Gemstone Exchange [Gemstone] to assail that part of the order dated 29 March 2019 passed by the Commissioner by which the demand of outstanding cost recovery charges has been confirmed and an order has been passed for its recovery with penalty of Rs. 5000/- under Regulation 12(8) of the 2009 Regulations. However, the custodianship of M/s Jaipur Gemstone Exchange has not been revoked nor the security has been forfeited. 3. It is, therefore, clear that similar issues are involved in these two appeals. They are, therefore, being decided by a common order. 4. The facility of customs clearance of goods for export/ import and for assessment, levy and collection of customs duty in hinterland in important cities with a view to decongest the Ports at Entry Points was started sometimes in 1995. For this purpose, help was sought from private/public sectors for providing premises suitable for Customs Officers and could be declared as "Customs Area" and "Customs Ports" as defined under the Customs Act 1962 [the Act]. Such Container Freight Stations [CFS], Air Cargo Complexes [ACC] and Inland Container Depots [ICD] (ICD) ....
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....otice appointing it as Custodian of Imported goods and the goods to be Exported. 8. Gemstone (the second Appellant) was appointed as Custodian of ACC for Import and Export Cargo of diamond, precious and semi-precious stones by a Notification dated 24 April, 2007. 9. It needs to be noted that the aforesaid Circular dated14 December, 1995 was replaced by the Handling of Cargo in Customs Area Regulations 2009. The Ministry of Finance also issued a Notification dated 12 September 2005 regarding Cost Recovery Posts in respect of the Customs staff posted in ICD/CFS/ACC and the same is reproduced below: "I am directed to bring your kind attention that it has been decided to consider regularization of those cost recovery posts at ICDs/CFSs which have been in operation for two consecutive years with following performance benchmark for past two years:- (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 processed by ICDs/CFSs : 7200 per annum for ICD and 1200 for CFSs (iv) Benchmark at (1) to (3) shall be reduced by 50% for those ICDs/CFSs exclusively dealing with exports, as per staffing nor....
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....on dated 12 September 2005 and since they satisfied the conditions, the cost recovery charges were required to be waived. It was also pointed out that the writ petition filed in the Rajasthan High Court for waiver of the cost recovery charges was pending disposal and so was the application before the Board. 13. The Commissioner, however, passed orders confirming the demand of outstanding cost recovery charges under Regulations 5(2) and 6(1)(o) of the 2009 Regulations and imposed penalty of Rs. 5000 but the Custodianship of the two Appellants was not revoked nor the Security was forfeited. 14. It is against these two orders of the Commissioner, that the present Appeals have been filed for quashing that part of the orders that confirmed the demand of outstanding cost recovery charges and imposed penalty. 15. Learned Chartered Accountant appearing for the Appellant submitted that the provisions of Regulation 5(2) and 6(1)(o) of the 2009 Regulations do not provide for recovery of the cost recovery charges, nor penalty could have been imposed under Regulation 12 (8) of the 2009 Regulations and in support of this contention, reliance has been placed on a Division Bench decision of the....
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....goods and for handling of such goods, in a customs areas, hereinafter referred to as the applicant, shall fulfil the following conditions, namely:- (1) -------- -------- -------- (2) the applicant shall undertake to bear the cost of the Customs officers posted, at such custom area, on cost recovery basis, by the Commissioner and shall make payment at such rates and in the manner prescribed, unless specifically exempted by an order of the Government of India in the Ministry of Finance." 20. Regulation 6 deals with responsibilities of Customs Cargo Service provider. The impugned Orders rely upon Regulation 6(1)(o). It is reproduced below: "6. Responsibilities of Customs Cargo Service provider: (1) The Customs Cargo Service provider shall: ------------- (o) shall bear the cost of the customs officers posted by the Commissioner of Customs on cost recovery basis and shall make payment at such rates and in the manner specified by the Government of India in the Ministry of Finance unless specifically exempted by an order of the said Ministry." 21. Regulation 11 deals with suspension or revocation of the approval for appointment of a Customs Cargo Service Provider, while Reg....
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....mmissioner of Customs on cost recovery basis and shall make payments at such rates and in the manner specified by the Government of India in the Ministry of Finance unless specifically exempted by an order of the said Ministry. 23. The contention of the Appellants is that they were entitled to waiver of the cost of the Custom Officers posted by the Commissioner in terms of the Notification dated 12 September 2005 issued by the Board. It is stated that as no decision was taken on the said representation, Thar Port filed a Writ Petition in the Rajasthan High Court which is pending. Gemstone also sent a presentation to the Board in terms of the Circular for waiver of the recovery charges and for payment of merchant overtime charges. This representation is also stated to be pending. 24. The issue that arises for consideration in this appeal is as to whether the recovery of cost recovery charges could have been confirmed by the Commissioner exercising powers under Regulations 5(2) and 6(1)(o) of the 2009 Regulations and whether penalty of Rs. 5000/- could have been invoked. 25. As noticed above, the show cause notices dated 9 January, 2013 and 11 December, 2012 were issued to the App....
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....l have to bear the cost of officer deployed at their premises. Similarly, Regulation (12) of the CCAR does not prescribe for the recovery of defaulted cost recovery charge. But only states that the same is procedure for suspension or revocation of approval and imposition of penalty. 14. In view of above, we find that the learned Adjudicating Authority has not appreciated the legal provision as contained in HCR, referred above which do not indicate the machinery for realisation of cost recovery charge on account of being defaulted as is the case before us. In fact, we find that the show cause notice has invoked the provisions of Regulation 12 of HCCAR which does not provide for the realisation of the cost recovery charge but only revocation of the licence granted to CCSP on account of various breaches as contained therein. This regulation has no provisions for recovery of unpaid cost recovery charge on account of non-fulfilment of criteria as laid down in the CBEC circular. Thus, we find that the order passed by the learned Adjudicating Authority is beyond the scope of the provisions of HCCAR, 2009 more so when he has decided not to cancel the licence of the Appellant and only im....