2007 (9) TMI 62 - AT - Customs

Merchant Over Time (MOT) 100% EOU availed services of Jurisdictional Central Excise Officers for examination of seal of import and export consignment MOT will be paid for the services rendered even during the working hours of C.E. Officers working as Custom Officers

Summary

Issues:
1. Demand of Merchant Over Time (MOT) for services provided by jurisdictional Central Excise officers to a 100% EOU.
2. Applicability of Section 36 of the Customs Act, 1962 and Customs (Fees for Rendering Services by Customs officers) Regulations, 1998.
3. Interpretation of Circular No. 31/2003-Cus. dt. 7-4-2003 regarding payment of MOT.
4. Distinction between services rendered at the option of the appellant and mandatory services.
5. Admissibility of MOT for services provided during normal working hours.

Issue 1: Demand of Merchant Over Time (MOT) for services provided by jurisdictional Central Excise officers to a 100% EOU.

In the case, the appellant, a 100% EOU, availed the services of Central Excise officers for examination and sealing of consignments. The Original Authority confirmed a demand for MOT, which was upheld by the Commissioner (Appeals). The appellant argued that the officers' work was within normal working hours and referred to relevant Tribunal decisions. The Department contended that MOT is applicable for services beyond normal working hours in Customs areas. The Tribunal analyzed the nature of services provided to 100% EOUs, emphasizing the optional nature of such services. It concluded that the MOT for optional services was justified, leading to the dismissal of the appellant's appeal.

Issue 2: Applicability of Section 36 of the Customs Act, 1962 and Customs (Fees for Rendering Services by Customs officers) Regulations, 1998.

The demand for MOT was confirmed based on Section 36 of the Customs Act, 1962, and the relevant Customs regulations. The Tribunal considered the provisions in light of the appellant being a 100% EOU operating under self-clearance procedures. It highlighted the necessity of examination by officers in port areas and the freedom of EOUs to receive imports without examination at their factory. The Tribunal clarified that MOT was required for services provided at the option of the appellant, even during normal working hours, as per the applicable regulations.

Issue 3: Interpretation of Circular No. 31/2003-Cus. dt. 7-4-2003 regarding payment of MOT.

The appellant contested the application of Circular No. 31/2003-Cus., arguing that MOT was wrongly demanded even for work during normal working hours. The Tribunal examined the circular's provisions, emphasizing that MOT was prescribed for services rendered at the option of the appellant, irrespective of the officers' working hours. It distinguished between mandatory services and optional services, affirming the validity of MOT for the latter as per the circular's terms.

Issue 4: Distinction between services rendered at the option of the appellant and mandatory services.

The Tribunal clarified that services provided to the appellant were optional, as indicated by Circular No. 31/2003-Cus. The appellant had the choice to avail or decline such services, with MOT being applicable if the services were utilized. The Tribunal differentiated between services necessitated by regulations and those voluntarily requested by the appellant, upholding the requirement of MOT for optional services rendered by Central Excise officers.

Issue 5: Admissibility of MOT for services provided during normal working hours.

The appellant argued that MOT should not be demanded for services conducted during normal working hours. However, the Tribunal reasoned that the payment of MOT was tied to the optional nature of the services provided, regardless of the officers' regular working hours. It emphasized that the services were at the discretion of the appellant, leading to the conclusion that the recovery of MOT for such services was appropriate. Consequently, the appellant's appeal was dismissed, while the Department's appeal was allowed.

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