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2016 (10) TMI 446 - AT - CustomsCost Recovery Charges - notified CFS - CBEC instruction dated 14.12.95 read with circular No.52/97Cus dated 17.10.97, a CFS is required to deposit in advance cost recovery charges i.e. charges of the custom official posted at port - Whether the appellant can be held responsible for non payment of cost recovery charges when no calculation was made by the Revenue? - Held that - it is fact on record that cost recovery charges are to be calculated by the Revenue, the appellant cannot pay cost recovery charges without calculation of demand of cost recovery charges payable by the appellant - in the absence of any calculation of the demand made by the revenue, the appellant cannot be responsible for non payment of cost recovery charges. Whether the appellant is entitled for exemption from payment of cost recovery charges for March 2010 or not? - Held that - as per CBEC circular dated 12.9.05, if CFS achieved bench mark performance during the previous years, it is entitled for waiver of charges. The appellant has achieved the bench mark performance within the initial two years - the Revenue is duty bound to examine the issue and disposed of the claim of waiver failing which the Revenue cannot continue to demand of cost recovery charges from the appellant. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Entitlement to exemption from payment of cost recovery charges post-March 2010. 2. Responsibility for non-payment of cost recovery charges due to lack of calculation by the Revenue. Detailed Analysis: Issue 1: Entitlement to Exemption from Payment of Cost Recovery Charges Post-March 2010 The appellant, a notified Container Freight Station (CFS) since December 2007, argued that they achieved benchmark performance by February 2010, thus entitling them to a waiver of cost recovery charges as per CBEC instructions dated 12.09.2005. The appellant contended that the demand for charges post-March 2010 was unsustainable because the regulations and instructions did not specify the rate and manner of such charges. The appellant cited the case of Larsen & Toubro Ltd. (2015) and Suresh Kumar Bansal (2016) to support their argument that in the absence of prescribed rates and manner, the Revenue had no authority to demand these charges. The tribunal agreed with the appellant, noting that the CFS achieved the benchmark performance within the initial two years, and as per the CBEC circular dated 12.09.2005, they were entitled to a waiver. The tribunal held that the Revenue was duty-bound to examine and dispose of the waiver claim, and in the absence of such examination, continuous demand for cost recovery charges was unjustified. Issue 2: Responsibility for Non-Payment of Cost Recovery Charges Due to Lack of Calculation by the Revenue The appellant argued that they could not be held responsible for non-payment of cost recovery charges when the Revenue had not calculated the demand. The tribunal found that cost recovery charges are to be calculated by the Revenue, and the appellant could not pay these charges without such calculation. The tribunal emphasized that the appellant had made several payments as demanded by the Revenue but was not provided with a consistent or clear calculation of the charges. The tribunal further noted that Regulation 6(1)(o) of the Handling of Cargo in Customs Area Regulations, 2009, required CFSs to pay charges at rates and in a manner specified by the Ministry. However, no such rates or manner had been prescribed. The tribunal referred to the Supreme Court's decision in Larsen & Toubro Ltd., which highlighted the necessity of clear machinery provisions for the imposition of charges or taxes. Conclusion The tribunal concluded that the appellant could not be held responsible for the non-payment of cost recovery charges due to the Revenue's failure to provide a clear calculation. Additionally, since the appellant had achieved the benchmark performance and no specific rates or manner of payment were prescribed under the 2009 regulations, the demand for cost recovery charges post-March 2010 was invalid. Consequently, the tribunal set aside the impugned order and allowed the appeal with consequential relief. Result The appeal was allowed, and the impugned order was set aside, providing consequential relief to the appellant.
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