2017 (1) TMI 135 - AT - Customs

Recovery of Cost recovery charges - for period when ICD remained non-functional - Held that - It is clearly recorded that on perusal of the proposed arrangement between the third party and the appellant, that if such agreement was approved it will amount to virtually handing over the ICD to the third party which will be in violation of the appointment of custodian with related conditions. For such proposed action, the appellant cannot blame the delay on the part of the Revenue, for ICD being non-functional or not requiring the already appointed officers of Customs to discharge the work. We find no justification in the claims made by the appellant in this regard. Regarding the payment of arrears consequent to 6th Pay Commission, we find that this is directly relating to the pay and allowances of the Officers deployed when the officer were deployed to do the duties at the ICDs of the appellant. It is necessary that the cost recovery charges as fixed by the Government are to be paid by the appellant. The lower authorities were bound by the provisions of Customs Act, 1962. HCCAR, 2009 and guidelines issued by the Board while appointing and monitoring the working of ICDs. The lower authorities in compliance of such statutory obligations have proceeded to recover the cost recovery charges as mandated in the said Regulation. We find no reason to interfere with such action - appeal dismissed - appellant liable to pay cost recovery charges - decided against appellant.

Summary

Issues:
Appellant's liability to pay cost recovery charges for deployment of customs officers at Inland Containers Depots (ICDs) managed by them in Rajasthan.

Analysis:
The appeals dealt with the liability of the appellant, a Government of Rajasthan undertaking managing ICDs, to pay cost recovery charges for customs officers' deployment at ICDs in Bhilwara, Jodhpur, and Bhiwadi. The appellant challenged penalties imposed for violating the Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR, 2009). The appellant argued that the Commissioner of Customs did not consider the background developments, and they should not pay arrears of pay and allowances. They also claimed delays in outsourcing activities and contractual arrangements with the Customs authorities. The Revenue contended that the appellant did not comply with the Regulations despite extensions and failed to pay cost recovery charges, leading to penalties.

The Tribunal found that the appellant was appointed custodian under the Customs Act, 1962, and was obligated to pay cost recovery charges for customs officers' deployment as per the Regulations. The Tribunal cited specific provisions and circulars supporting the requirement for cost recovery charges. The Tribunal rejected the appellant's argument regarding non-functional periods of ICDs and the delay in outsourcing activities, emphasizing the Commissioner's authority to ensure compliance. The Tribunal also addressed the issue of paying arrears related to the 6th Pay Commission, citing legal obligations under the Customs Act and judicial precedents.

The Tribunal upheld the lower authorities' actions, emphasizing compliance with statutory obligations under the Customs Act, 1962, and HCCAR, 2009. The Tribunal noted the appellant's lack of diligence in fulfilling obligations as custodian and dismissed the appeals. The Tribunal highlighted the department's efforts to communicate legal obligations and the appellant's failure to comply promptly, leading to consequences for non-compliance. The Tribunal concluded that there was no reason to interfere with the lower authorities' findings and upheld the recovery of cost charges as mandated by the Regulations. The appeals were ultimately dismissed, affirming the lower authorities' decisions.