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2022 (6) TMI 997 - HC - CustomsDemand of amount over and above the amount towards cost recovery charges for deputing officers of the customs in the petitioner s Inland Container Depot (ICD) - petitioner has been handling more than 7,200 TEUs containers at ICD, Hosur per annum from September 2017 onwards - eligibility for grant of waiver from the Cost Recovery Charges in terms of Circular dated 12.09.2005 - HELD THAT - The issue relating to the payment of cost recovery charges was elaborately considered in M/S. SUN GLOBAL LOGISTICS PVT. LTD. VERSUS UNION OF INDIA, CENTRAL BOARD OF EXCISE CUSTOMS, COMMISSIONER OF CUSTOMS (SEA EXPORT) , DEPUTY COMMISSIONER OF CUSTOMS (ENQUIRY) , ASSISTANT COMMISSIONER OF CUSTOMS (APPG. DOCKS-ADMN) , CHENNAI 2021 (6) TMI 429 - MADRAS HIGH COURT where it was held that unless there is an appropriate amendment to the provisions and the Customs Act,1962 and the Rules made thereunder which fall within the four corners of Part XIV of the Constitution of India Cost Recovery Charges equivalent to the Salaries packs paid to such officials of the Customs Department cannot be justified. There are no merits in the contention of the respondents in the impugned order. Therefore, the writ petition stands allowed.
Issues Involved:
1. Demand for Cost Recovery Charges (CRC) from the petitioner. 2. Petitioner's request for waiver of CRC. 3. Legitimacy and calculation of CRC by the Customs Department. 4. Applicability of relevant circulars and regulations. Detailed Analysis: Demand for Cost Recovery Charges (CRC) from the Petitioner: The writ petition was filed to challenge the demand notice dated 06.07.2020, issued by the Assistant Commissioner of Customs, demanding Rs.2,14,31,618/- from the petitioner. This amount was demanded over and above the amount already paid by the petitioner towards cost recovery charges for deputing customs officers at the petitioner’s Inland Container Depot (ICD) in Hosur. The petitioner argued that the demand was unwarranted as the officers were not posted until 2017, and only a few were posted from April 2017 onwards. Petitioner's Request for Waiver of CRC: The petitioner contended that they had filed an application for a waiver of CRC in terms of the Circular dated 12.09.2005, as they had been handling more than 7,200 TEUs containers per annum from September 2017 onwards. The petitioner had already paid an initial amount of Rs.43,96,401/- for the period between April 2017 and March 2019, after adjusting Rs.21,45,330/- and a further sum of Rs.3,62,234/- for April 2019 to August 2019. Legitimacy and Calculation of CRC by the Customs Department: The respondents argued that the petitioner was required to pay 185% of the total salary of officers actually posted at its ICD. The Government had decided to waive CRC if certain conditions were met and the waiver would be prospective, not retroactive. The petitioner failed to pay the arrears, and thus, the waiver could not be granted. The respondents also argued that officers were posted permanently and exclusively for the petitioner’s ICD, justifying the CRC demand. Applicability of Relevant Circulars and Regulations: The court referred to the case of Sun Global Logistics Private Limited Vs Union of India, which elaborated on the issue of CRC. It was concluded that CRC could only be compensatory and not equivalent to the entire salary of customs officers. The court noted that the Handling of Cargo in Customs Area Regulations, 2009, required proper notification specifying the manner of CRC payments. In the absence of such notification, the collection of CRC was deemed contrary to the regulations. The court directed the Central Board of Excise and Customs to issue appropriate notifications specifying CRC rates and to amend the Handling of Cargo in Customs Areas Regulations, 2009, to incorporate provisions for waiver/exemption from CRC. The jurisdictional Commissioner/Chief Commissioner was directed to regularize the petitioner’s case by granting waiver/exemption from the date the petitioner achieved the benchmark as per the CBEC Circular dated 12.09.2005. Conclusion: The court found no merit in the respondents' contentions and allowed the writ petition, directing the respondents to regularize the payments already made by the petitioner and grant waiver/exemption from CRC for the period after the petitioner achieved the required benchmark. The writ petition was disposed of with no costs, and the connected miscellaneous petitions were closed.
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