TaxTMI 
TaxTMI 
2021 (6) TMI 429
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....esaid demand in the impugned communication dated 11.2.2013 is the net of the gross demand of Rs. 1,64,25,173/- after adjusting a sum of Rs. 40,01,960/- paid by the petitioner. 5.In W.P.No.7938 of 2013, paragraph 2.10 from The Customs Manual dated 2.2.2012 has been challenged in so far as its seeks to impose the payment of arrears of cost recover charges as a condition precedent for waiver from cost recovery charges. Relevant portion from the Customs Manual impugned in the said writ petition reads as under:- 2.10.Cost Recovery Charges to be paid by ICD/CFS may waived if they fulfil laid down norms and are in existence for a consecutive period of two financial years. Accordingly, in respect of eligible ICD/CFSs specific orders in individual cases for grant of exemption from payment of cost recovery charges are issued by Ad.IV Section of the Board. As per the existing instructions, the cost recovery post and ICD/CFS which have been in operation for two consecutive years with following performance benchmark for past two years will be considered for regularisation of cost recovery posts. The waiver of cost recovery charges would be prospective with no claim for past period. ....
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....05.08.2010 to the Deputy Commissioner of Customs - requested for waiver of Cost Recovery Charges (CRC) as the petitioner had completed two years of operation and had achieved the requisite benchmark. 12.The learned counsel for the petitioner placed reliance on the following decisions:- i)Thiru Rani Logistics Pvt., Ltd., vs. DIR General, DGHRD,C.&C.E.,New Delhi, 2016(340)E.L.T.160 (Mad.) ii)D.R.Logistics (P) Ltd., vs. Union of India, 2017(356) E.L.T.205(Mad.) iii)Commissioner of Customs, Ludhiana vs. Krishna Cargo Movers P.Ltd., 2020(371) E.L.T.633 (P & H) iv)M/s.Overseas Warehousing Pvt.Ltd., vs. Union of India and Others, CWP-5079- 2014(O&M) v)M/s.Miv Logistics Pvt.Ltd vs. Commissioner of Customs, Kerala, 2020(2) TMI 876 - CESTAT Bangalore vi).Kottayam Port and Container Terminal Services Pvt.Ltd., vs Union of India 2013 SCC Online Ker 19319 vii)Diamond and Gem Dev.Corporation vs. Union of India, 2016(342) E.L.T. 366(Guj.) viii)Union of India and Others vs. A.K.Pandey, (2009) 10 SCC 552 ix)Indian Oil Corporation Ltd., vs Central Board of Excise and Customs (2020) 371 ELT 448 x)CIT vs B.C. ....
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....g. I am directed to refer to the various ICDs/CFSs approved by IMSC/Board to facilitate import/export work from time to time. The staff is being sanctioned by Board to deal with customs work at such places. Staff for all the new ICD is being sanctioned on cost recovery basis. Government of India have approved norms for sanction of Customs Staff for ICD and CFS as under:- (i)The ICDs notified under Section 7(aa) and approved for export only will have customs staff of 7 (Asstt. Commissioner - 1; Appraiser- 1 ; Examining Officer - 1; UDC - 1; LDC - 1; Sepoys - 2). (ii)The ICDs notified under Section 7(aa) of the Customs Act, 1962 and approved both for Export and Import work will have customs staff of 13- (AC -1; Appraiser - 2; Examining Officer - 2; UDC - 2, LDC - 2; Sepoy - 4). The said sanction shall be obtained for all formations ab initio. 2.However the Custodian, in the initial stages of operations, may not need the full strength of the Officers in the cadres where more than one officer is sanctioned like Appraiser, Examining Officer, UDC and LDC. In such a situation, if, the Custodians request, the Commissioner of Customs may, after due consid....
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....performance of ICDs/CFSs. (3)Based on the performance of ICDs/CFSs in the Financial Year 2003-04 and 2004-05, you are requested to provide the information as per enclosure in respect of ICDs/CFSs for which regularization of posts are suggested, no cost recovery charges are under dispute or pending payment as on 31st August, 2005. (4)Member (Customs) has desired that information should be submitted by 19-9-2005 by return FAX and by email at [email protected](.) Yours sincerely (Anupam Prakash) Under Secretary to the Government of India. Ph : 23094182, Fax-23092173 Enclosure : As Above 22.Between the July, 2008 to March, 2013, the Petitioner claims to have paid a sum of Rs. 45,01,960/- to the Customs Department towards on cost recovery basis. 23.Before, Handling of Cargo in Customs Areas Regulations, 2009 in the 2009 come into force, the VI Pay Commission came to be implemented. The petitioner was therefore asked to pay the differential amount on account of implementation of the VI Pay Commission which the petitioner has resisted by agitating the issue. 24.In the year 2009, the Handling of Cargo in Customs Areas Regulations, 20....
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....ficers of the Customs Department on Cost Recovery Charges Basis (CRC) is not new. The concept of charging fees has been in vouge for quite some . 32.Same practice which was adopted under Section 141(2) & 36 of the Act when ICD/CFS were allowed to operate as Customs Cargo Service Providers. 33.The power to levy and collect Cost Recovery Charges from a Customs Cargo Service Provider under the aforesaid Regulation is traceable to Section 157 and 158 of the Customs Act, 1962. 34.Under Section 157 of the Customs Act, 1962, the Board may for the purposes of carrying out the object of the Act make regulations consistent with the Act and the Rules made thereunder. 35.In particular, as per Section 157(2) of the Customs Act, 1962 and without prejudice to the generality, such regulations may provide for all or any of the following matters, namely:- (a)the form of a bill of entry, shipping bill, bill of export, import manifest, import report, export manifest, export report, 412 [bill of transshipment, declaration for transshipment], boatnote and bill of coastal goods; (ai)the manner of export of goods, relinquishment of title to the goods and abandoning them to cu....
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.... customs under this Act; [(ii)that any person who contravenes any provision of a rule or regulation or abets such contravention or who fails to comply with any provision of a rule or regulation with which it was his duty to comply, shall be liable to a penalty which may extend to fifty thousand rupees." 38.Thus, there is amble power vested with the Central Government and the Central Board of Excise and Customs as the case may be to make regulations for levying fees in respect of applications, amendment of documents, furnishing of duplicates of documents, issue of certificates, and supply of statistics, and for rendering of any services. 39.Therefore, there is no difficulty in arriving at a conclusion that both the Central Government and the Central Board of Excise and Customs have power to make a regulation Handling of Cargo in Customs Areas Regulations, 2009 and to levy Cost Recovery Charges from service providers to whom it deputes its officer. 40.After Handling of Cargo in Customs Areas Regulations, 2009 came into force, the Central Board of Excise & Customs, New Delhi Vide M.F. (D.R.) Circular No. 13/2009-Cus., dated 23-3-2009 in F.No. 450/55/2008-Cus.IV clari....
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....it cannot be applied to the facts of the present case for the reasons stated above. 47.As mentioned above, even prior to approval were being to Container Freight Station and Internal Container Depots, (ICDS), the practice of collection of Cost Recover Charges and Merchant overtime Fees (MOT) were in vogue. 48.Section 36 of Customs Act, 1962 provides for payment of prescribed fees for loading or unloading of the goods for Export /Import on any conveyance on any Sunday or any holiday observed by the Customs Department or any other day after the working hours, except after giving the prescribed notice. 49.Similarly under Section 141(2) of the Customs Act, 1962 any 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 persons engaged in the aforesaid activities shall be such as may be prescribed. 50.Earlier, Customs (Fees for Rendering Services by Customs Officers) Regulations, 1968 was in force. It was replaced by Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998 vide Notification No. 69/98-Cus (NT) dated 5.9.1998. 51.It wa....
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....d Section 158 of the Customs Act, 1962. 59.As per the definition, a "customs area" means the area of a customs station and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities. 60.The reasons for asking Customs Cargo Service Providers to bear cost of salaries has been explained in circular dated 23.6.2014 in F.No. 8/B/12/HRD (EMC)/2014 of the Directorate of Human Resource Development of the Customs and Central Excise, New Delhi. 61.The said circular also deals with the issues relating to waiver of payment/exemption from Cost Recovery Charges sponsored by Joint Secretary 62.The history behind creation and deployment of officer in various facilities on cost recovery basis has been also discussed in letter dated 22.08.2019 bearing Reference F.No.8/B/85/HRD(EMC)/CRB/2015 Pt./6127 F. No. Government of India, Ministry of Finance, Department of Revenue, Directorate General of Human Resource Development Customs & Central Excise (Expenditure Management Wing) C-4 (West Wing), IRCON Building, District Centre, Saket, New Delhi- 110 017. It reiterates the clarification issued on 10.08.2018 in its communication bearing ....
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....try of Finance Department of Revenue, Board of Excise & Customs New Delhi, dated the 26th of June, 2015 OFFICE MEMORANDUM The minutes of the Board meeting held on June 18, 2015 in respect of BMB No.5/2015 are enclosed herewith for favour of information and necessary action. 2. The same are issued with the approval of Chairman, CBEC. Encl. a/a (Hemambika R. Priya) Commissioner (Coord) / Secretary (CBEC) 1. Chairman, CBEC 2. Member (Budget) 3. Member (Cus) 4. Member (ST) 5. Member (CX) 6. Member (P&V) 7. Member(L&J) 8. DG(HRD)/AII CCs of Customs Zone 9. JS(Cus) 10.Guard file Copy for kind information to: PS to FM / PS to MOS (R) / PPS to Revenue Secretary 58.In the Minutes of the board meeting held on 15thJune 2015 in respect of BMB No.05/2015 BMB No.05/2015 the issue was discussed. Issue in brief: Waiver of Payment/exemption of cost recovery charges - Sponsored by Joint Secretary (Customs) Joint secretary (Customs) briefed the Board on the issues relating to the grant of exemption of payment of cost recovery charges for ....
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.... issue is in respect of few facilities that were functioning prior to fixing of norms for staffing and grant of exemption in April, 2013 and wherein the number of Customs officers already working on cost recovery basis was found to be in excess of the norms. 3. In regard to the outstanding issues mentioned at para 2 above, the D/o expenditure has responded as follows: i. No comments are offered on the issue of waiver of CR charges and this may be done by DoR as per norms. ii. DoE cannot sanction posts ex post facto. Such posts may be subsumed in the posts created during the cadre restricting of CBEC. iii. Proposals for prospective sanction of posts may be referred to DoE for approval. 4. DG(HRD), CBEC has examined the comments of D/o Expenditure and have furnished following comments: i. Based upon DoE's stipulation that posts cannot be sanctioned ex post facto, the diverted posts may be treated as absorbed in the existing cadre strength. As per HRD, CBEC, there are a total of 1,630 posts which would be subsumed within the existing cadre strength. HRD, CBEC has justified this on the ground that the Commissionerate concerned have ....
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....(CBEC). iii Exemption from cost recovery charges must be for the total number of sanctioned posts for which cost recovery charges were taken. To restrict the exemption to the number of staff indicated. In the subsequently prescribed staffing norms when the deployment of staff and recovery of cost recovery charges was for more staff (as per sanction) would be against Government policy. 6. On the basis of above, following proposals were placed before Board for consideration: i.Allow, as a one-time measure, Chief Commissioner of Customs to exempt as per norms, cost recovery charges for eligible facilities for which posts were not sanctioned, DG(HRD), CBEC would monitor the action; and iimpt cost recovery charges for the entire staff sanctioned for which cost recovery charges were taken for eligible facilities even if it is in excess of the 2013 norms, D/o. Expenditure would deal with these cases. 7. The Board deliberated the issues and observed that the Commissionerates concerned had facilitated the functioning of these facilities by diverting staff to them on the cost recovery basis without obtaining sanction, though there is no implicatio....
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....t (c) above. f.The exemption of cost recovery charges for eligible facilities would be for the entire staff deployed provided this number does not exceed the number as per the staffing norms. Staff deployed on cost recovery basis in excess of the staffing norms without sanction would be withdrawn. There should, however, be no dislocation of day-today working in the facilities due to such withdrawal for which suitable arrangement should be made. g.For purposes of uniformity DG(HRD) would reiterate to the Chief Commissioners of Customs / Central Excise the instruction that cost recovery charges should be recovered for the staff actually deployed, which should not exceed the staffing norms, and that requisite sanction must invariably be obtained before operationalizing a facility. 59.The above clarification of the Central Board of Excise and Customs has highlighted problems with the deployment of staff and amounts charged on Cost Recovery Charges(CRC) basis in these facilities. Paragraph 8 of the above clarification has also given the solutions for the problems pointed. It has been observed that in many facilities cost recovery charges were being levied o....
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....Customs Act,1962 and the Rules made thereunder which fall within the four corners of Part XIV of the Constitution of India Cost Recovery Charges equivalent to the Salaries packs paid to such officials of the Customs Department cannot be justified. 62.Since such officers deployed continue to be officers of the Customs Department and report to their jurisdictional superiors within the jurisdiction of the Custom House of their Chief Commissioner of Customs or Commissioner of Customs of the Custom House, there is neither a Legal basis nor any justification collecting the entire salary payable to such officer from Customs Cargo Service Providers. 63.Cost Recovery Charges can be only compensatory and such amounts may be charged for the excess amount paid/payable to the employees of the Customs Department by way of reimbursement of expenses. Merely because the VI Pay Commission was implemented by itself did not entitle the Customs Department to recover the entire amount separately from the Container Freight Stations(CFS) or Internal Container Depots(ICD). This was contrary to the statutory scheme of the Customs Act, 1962 and Constitution of India. 64.Container Freight Stations(CF....
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....e customer who had availed of services of the petitioner. Therefore, there can be no order for refunding of the amount. Therefore, only way out is to regularize the amounts already paid & collected in the past. 72.Since the petitioner has also demonstrated that it had fulfilled the criteria/benchmark for exemption from payment of Cost Recovery Charges during the first two years of approval and operation, the case of the petitioner deserves to be considered for waiver/exemption from payment of Cost Recovery Charges in terms of the guidelines of the Central Board of Excise and Customs in its meeting held on 18 June 2015 in respect of BMB No 5/2015, content of which has been extracted above in this order. 73.There cannot be any discrimination between different approved "Customs cargo service provider" under the provisions of the Handling of Cargo in Customs Areas Regulations,2009. It has to be also underlined that there is no direct provision under the Handling of Cargo in Customs Areas Regulations,2009 for granting waiver from payment of Cost Recovery Charges payable by an approved "Customs Cargo Service Provider". Power to grant such waiver/exemption has been exercised right f....