2015 (1) TMI 1306 - HC - Central Excise

Refund claim - Whether MOT charges are not legally leviable for the services provided by the Central Excise Officers during the normal working hours as held by the CESTAT when the Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998 clearly warrant the levy of the same - appellant exporting goods after stuffing in containers at the factory premises under the supervision/examination of Central Excise Officers - paid Merchant Overtime (for short, MOT ) charges to the department for stuffing of containers for supervision by the Central Excise Officers - Held that - the overtime fee is collected under section 36 of the Customs Act read with Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998. Section 36 of the Customs Act allows loading/unloading of imported/export cargo from any vessel beyond any working hours or any working day or on holiday only on payment of prescribed fees. The rate and the manner of collection of such fee is given in the Regulations of 1998. In the present case, the stuffing was done in the factory of the respondents under the supervision of jurisdictional Central Range Officers during the working hours. In the circumstances, the MOT charges were not payable. - Decided against the Revenue

Summary

Issues:
- Whether MOT charges are legally leviable for services provided by Central Excise Officers during normal working hours?

Analysis:
The case involved a D.B. Excise Appeal under section 35G of the Central Excise Act, 1944, arising from an order passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi. The appellant, engaged in manufacturing yarn, paid Merchant Overtime (MOT) charges to the department for stuffing containers under the supervision of Central Excise Officers. The appellant filed a refund claim for MOT charges paid under protest from September 2001 to June 2003, which was rejected by the Deputy Commissioner and upheld by the Commissioner (Appeals).

The Tribunal, citing previous judgments, held that supervision charges were not payable when inspections were conducted by Central Excise Officers within their jurisdiction. The Department argued that the supervisions and inspections were carried out beyond the normal place of work of the Officers, making the charges leviable. However, the Board Circular clarified that services by Customs Officers include work beyond the customs area at any time.

Referring to previous cases, the Court emphasized that MOT charges are not payable when supervision is conducted within the normal place of work of the Officers. The judgment in Sigma Corporation (I) Ltd. vs. CCE was upheld by the Delhi High Court in Commissioner of Central Excise vs. Sigma Corporation India Pvt. Ltd. The Court examined the Customs Act and Regulations, highlighting that the overtime fee is collected for specific activities beyond normal working hours. In this case, stuffing was done in the factory under the supervision of jurisdictional Central Range Officers during working hours, making MOT charges not payable.

In conclusion, the Court dismissed the Central Excise Appeal, deciding the question of law against the Department and in favor of the respondent-assessee.