2017 (7) TMI 707 - HC - Customs

Arrears of cost recovery charges - case of petitioner is that when a direction has been issued to consider the representation seeking exemption, issuance of the impugned demand is not sustainable - Held that - the petitioner cannot escape from the liability as raised in the demand dated 17.12.2008 for the period from April, 2007 to December, 2008, which has been quantified at ₹ 20,52,498/-. What is important to note is that thought the petitioner s application for exemption was not considered and no orders were passed, the petitioner on their own volition stopped remitting the charges from the period of January, 2009. Such conduct of the petitioner is not appreciable, as unless and until exemption is granted the petitioner has to pay the said amount without prejudice their rights to seek for exemption from the CBEC. Petition dismissed - decided against petitioner.

Summary

Issues involved:
Challenge to order directing payment of arrears of cost recovery charges, plea for exemption from charges, consideration of exemption conditions, petitioner's conduct in stopping payment, imposition of conditions by the court, directions for payment and bond, consideration of exemption application by CBEC.

Analysis:

1. Challenge to order directing payment of arrears of cost recovery charges:
The petitioner challenged an order directing payment of arrears of cost recovery charges for a specific period. The petitioner contended that an application for exemption from these charges was pending before the Central Board of Excise and Customs (CBEC) and sought relief based on a previous court order directing consideration of the representation for exemption.

2. Plea for exemption from charges:
The petitioner claimed entitlement to exemption from cost recovery charges based on a Notification issued by the CBEC exempting certain entities handling a minimum volume of cargo. The petitioner argued that the application for exemption had been forwarded to the CBEC, and no decision had been made by the competent authority.

3. Consideration of exemption conditions:
The Senior Central Government Standing Counsel highlighted specific conditions laid down by the CBEC for exemption of charges, emphasizing that the petitioner had not fulfilled these conditions. The court refrained from expressing an opinion on the petitioner's entitlement pending a decision by the CBEC.

4. Petitioner's conduct in stopping payment:
The court noted that the petitioner had stopped remitting charges from a certain period despite the absence of a granted exemption. The court criticized this conduct, stating that the petitioner must pay the amount until exemption is granted.

5. Imposition of conditions by the court:
Considering the prolonged pendency of the writ petition and the interim stay against recovery charges, the court imposed conditions on the petitioner for further directions to the CBEC regarding the pending exemption application.

6. Directions for payment and bond:
The court directed the petitioner to pay the demanded sum within a specified period, along with a percentage of charges for a subsequent period. Additionally, the petitioner was instructed to furnish a bond to the satisfaction of the third respondent.

7. Consideration of exemption application by CBEC:
The court directed the CBEC to consider the petitioner's exemption application if all conditions were met. Failure to comply with the conditions would result in dismissal of the writ petition, allowing the department to proceed legally.

8. Conclusion:
The court disposed of the writ petition with detailed directions for payment, imposition of conditions, and consideration of the exemption application by the CBEC. The petitioner was instructed to adhere to the specified requirements to maintain the benefits of the court's order.

This comprehensive analysis covers the issues involved in the legal judgment, highlighting the key arguments, considerations, and directions provided by the court.