2016 (2) TMI 180 - AT - Customs

Recovery of Merchant Over Time (MOT) charges or Cost Recovery charges from the appellant - manufacture of vessel is conducted under supervisions of Customs Officers - Held that - in the case where no services are provided, no cost recovery charges can be demanded - no cost recovery can be done when there was no officer specifically posited on cost recovery basis. - As regards the rate at which cost recovery is made is concerned, the same is administrative decision at which CESTAT has no jurisdiction.

Summary

Issues: Recovery of Cost Recovery charges for manufacturing under bond, Jurisdiction of CESTAT regarding supervision charges, Applicability of administrative decisions on appeal.

Recovery of Cost Recovery charges: The appellants, engaged in manufacturing vessels under Customs Act supervision, were demanded &8377; 9,95,614/- for Cost Recovery charges from 1.1.2006 to 30.6.2009. The challenge was based on no officer being posted during 1.1.2006 to 15.7.2007, thus no charges should apply. They argued that they already paid more than the total charges due when an officer was present. Citing a High Court decision, they contended that no fees should be charged if no services are provided by Customs officials. The Tribunal held that no cost recovery could be imposed when no officer was specifically posted for such recovery.

Jurisdiction of CESTAT: The Respondent argued that CESTAT had no jurisdiction over supervision charges, citing previous decisions where refund of such charges was considered an administrative decision not appealable. However, the Tribunal clarified that while the recovery of supervision charges falls under Customs Act powers, the rate of recovery is an administrative decision not within CESTAT's jurisdiction. The Tribunal referred to the High Court decision to support its ruling that no cost recovery could be demanded without services being provided by a posted officer.

Applicability of administrative decisions on appeal: The Tribunal differentiated between the jurisdiction of CESTAT concerning the recovery of charges under the Customs Act and the administrative decision on the rate of recovery. It held that the appeal was not maintainable regarding the rate at which cost recovery was made, as it constituted an administrative decision beyond CESTAT's purview. Therefore, the impugned order was modified to reflect this distinction.