2013 (4) TMI 649 - HC - Central Excise

Merchant Overtime Tax Charges (MOT) - whether the Central Excise Officer has discharged his duty in the factory premises of respondent & has functioned as a Customs Officer , as such, MOT is leviable? - Held that - It is an admitted position that stuffing work was done in the factory of respondent under the supervision of jurisdictional Central Range Officer during working hours only. The place of working/supervision was at the factory of the respondent which is at Mayapuri. Respondent has pointed out that as per Notification No.14/2002-CE(NT) dated 08.03.2002 as amended by Notification No.22/2002-CE(NT) dated 04.06.2002, the jurisdiction of Delhi II, Range 26 of Central Excise division-V includes Mayapuri Indl. Area Ph.-II where the factory of respondent is located, the services were rendered by the officer within his range only. The same fell within the jurisdiction of the Central Excise Range Officer who supervised the work. Chapter 13 of the CBEC s Customs Manual deals with Merchant Overtime Fee wherein it is provided that if services are rendered by the Customs Officer at a place which is not his normal place of work or a place beyond the Customs area, overtime is levied even during the normal working hours. Thus none of the conditions for levy of MOT is satisfied.

Summary

Issues:
- Appeal against final order passed by Customs, Excise & Service Tax Appellate Tribunal
- Dispute over payment of Merchant Overtime Tax Charges (MOT charges)
- Interpretation of Section 36 of the Customs Act and relevant regulations
- Determination of whether Central Excise Officer working as Customs Officer in factory premises constitutes a Customs Area

Analysis:
The judgment pertains to an appeal under Section 35 G(2) of the Central Excise Act, 1944, challenging a final order by the Customs, Excise & Service Tax Appellate Tribunal. The dispute revolves around the payment of Merchant Overtime Tax Charges (MOT charges) amounting to Rs 3,37,900, which the Commissioner (Appeals) had directed the respondent to pay. The issue at hand was whether the services rendered by a Central Excise Officer, acting as a Customs Officer, in supervising the stuffing of goods in containers at the factory of the respondent warranted the levy of MOT charges.

The respondent, a manufacturer and exporter of auto parts under the DEPB Scheme, contended that no MOT charges were payable for the supervision services provided by the Customs Officer since they were carried out during regular working hours within the officer's jurisdictional range. The Tribunal upheld the respondent's position, stating that the services were rendered within the officer's normal place of work, thereby not meeting the conditions for levying MOT charges. Subsequently, the present appeal was filed challenging the Tribunal's decision.

The central question of law in this case was whether the Central Excise Officer, while discharging duties as a Customs Officer in the factory premises of the assessee, could be deemed to be operating within a "Customs Area" as defined by the Customs Act, 1962. The appellant argued that the officer's functions as a Customs Officer were triggered when supervising activities like cargo stuffing at the factory, thus justifying the imposition of MOT charges. Conversely, the respondent contended that since the services were provided within the officer's range and normal place of work, no MOT charges were applicable.

The court examined the relevant provisions of Section 36 of the Customs Act and the Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998. It was established that the stuffing work in question was conducted during regular working hours at the factory located within the jurisdiction of the Central Excise Range Officer. Citing specific notifications and manuals, the court concluded that the conditions for levying MOT charges were not met in this scenario. Consequently, the court dismissed the appeal, affirming that no MOT charges were payable in the present case.

In conclusion, the judgment clarifies the delineation between Customs and Central Excise duties in the context of supervisory services provided by officers, emphasizing the significance of the location and circumstances under which such services are rendered in determining the applicability of MOT charges.