2016 (8) TMI 394 - HC - Customs

Cost recovery charges in respect of the Customs Officers deployed at the CFS waiver exemption from payment by a specific order or a circular or instructions issued by the Ministry of Finance - conditions stipulated in Clauses 2.8 and 2.10 of the Customs Manual to claim exemption application recommended and forwarded by 6th respondent subsequent representations made no consideration - matter still pending. - Held that - From a perusal of Clauses 2.8 and 2.10 of the Customs Manual, it is seen that the cost recovery charges to be paid by the ICD/CFS may be waiver subject to fulfillment of conditions laid down. The regulations issued the expression may and it cannot be stated to be mandatory. In any event, an exemption notification has to be strictly construed and a person claiming exemption has to fulfill all parameters and thereafter, it is for the authority to consider the plea of exemption . Direction to the 2nd respondent to consider the petitioner s application/representation dated 29.03.2016 claiming exemption/waiver of cost recovery charges and pass orders on merits and in accordance with law within a period of eight weeks from the date of receipt of a copy of this order writ petition dismissed.

Summary

Issues:
1. Petitioner's eligibility for exemption of cost recovery charges.
2. Consideration of petitioner's application for waiver of cost recovery charges.
3. Validity of the impugned demand for payment of charges.
4. Direction to the 2nd respondent to consider the petitioner's application for exemption.

Analysis:
1. The petitioner, an off dock Container Freight Station (CFS), sought exemption from paying cost recovery charges for Customs Officers deployed at the CFS. The petitioner fulfilled conditions for exemption as per the Customs Manual but had not received a formal order granting exemption. The court noted that exemption notifications must be strictly construed, and until an order of waiver is granted, the petitioner is obligated to pay the charges. Consequently, the court dismissed the Writ Petition as the impugned demand could not be quashed due to lack of formal exemption order.

2. Despite dismissing the Writ Petition, the court acknowledged the pending application of the petitioner dated 29.03.2016 for waiver of cost recovery charges. The court directed the 2nd respondent to consider the petitioner's claim for exemption within eight weeks from the date of the order. This direction was given based on the fact that the 6th respondent had forwarded the petitioner's earlier request for waiver to the 2nd respondent, indicating that the claim should be reviewed.

3. The court highlighted that the authorization given to the Chief Commissioner of Customs to consider waiver requests appeared to be a one-time measure, and it was unclear if the authority still held the power to grant exemptions. As the petitioner had not received a formal waiver order as per the Customs Manual clauses, the demand for payment of charges could not be invalidated. Therefore, the impugned demand for payment of charges was upheld by the court.

4. In conclusion, while confirming the impugned demand for payment of charges, the court directed the 2nd respondent to review and decide on the petitioner's application for exemption within eight weeks. The court emphasized the need for the 2nd respondent to consider the petitioner's claim in accordance with the law and on its merits. No costs were awarded, and the connected Miscellaneous Petitions were closed as per the court's order.