2024 (6) TMI 788 - HC - Customs

Denial of exemption from cost recovery charges - Container Freight Station (CFS) - Customs Area Regulation - HELD THAT - The exemption scheme issued by the Central Board of Indirect Taxes and Customs (CBIC/CBEC)) are not withdrawn. Tthe petitioner is eligible for exemption from cost recovery charge from the date of payment of the pending arrears i.e. Principal amount along with interest. The department is directed to compute and intimate the petitioner the interest and any other dues payable by the petitioner in complete settlement for the period 2011-2013. Once the petitioner makes the payment the concerned authority is directed to consider the applications for waiver and de-notification as expeditiously as possible preferably within one month. The petition is disposed off.

Summary

Issues:
1. Petitioner seeking relief through a writ petition under Article 226 of the Constitution of India.
2. Dispute regarding exemption from cost recovery charges for a Container Freight Station (CFS).
3. Interpretation of Circular granting waiver/exemption conditions for CFSs.
4. Application for exemption from cost recovery charges and disputes regarding arrears.
5. Demand notice issued for arrears of cost recovery charges.
6. Dispute over payment of interest on arrears.
7. Eligibility of petitioner for exemption and computation of interest and dues.
8. Directions for settlement and consideration of waiver application.

Analysis:
The petitioner, a company operating a Container Freight Station (CFS), filed a writ petition seeking relief from the denial of exemption from cost recovery charges. The Customs Area Regulation 2009 mandates CFSs to bear costs of customs officers unless exempted. A Circular specified waiver conditions based on performance benchmarks and operational history. The petitioner met the benchmarks and applied for exemption prospectively from 30.06.2010. Disputes over arrears led to previous court interventions, culminating in the current petition.

The petitioner paid arrears as directed by the Supreme Court, seeking clarity on interest payable. The respondents acknowledged the exemption scheme's validity but insisted on full payment, including interest, for waiver consideration. The court noted the scheme's existence and directed computation of interest and dues for settlement. Once payment is made, the waiver application should be processed promptly.

In conclusion, the court disposed of the writ petition, emphasizing the petitioner's eligibility for exemption upon clearing arrears with interest. The judgment underscores the importance of compliance with payment obligations for seeking exemptions and directs timely processing of waiver applications.