2014 (12) TMI 195 - HC - Customs

Levy of establishment charges of the customs staff posted for such jetty - Change of regime form MOT - Due to various reasons including the global economic slow down, jetty could not operate to its full capacity - Even the department due to shortage of staff was not able to provide full agreed staff permanently stationed at jetty - According to the petitioner despite such arrangement, the department demanded full reimbursement of establishment charge on the basis of full custom staff on paper deployed for the place - Held that - Even the department agrees that for some reason or the other including the shortage of staff with the department, the full staff was not deployed at jetty through out the entire period. Secondly, that because of such difficulties even the department was toying with idea of considering permitting the petitioner to switch over to MOT regime. The department therefore, would have to undertake an exercise and verify whether and upto which period such shortage in deployment of staff occurred. This however, cannot be for the entire period and must be limited to some reasonable recent past. The department would also have to consider the request of the petitioner for change of regime. - Matter remanded back - Decided in favour of appellant.

Summary

Issues:
1. Interpretation of conditions in the notification under the Customs Act regarding the establishment charges for custom staff at a private jetty.
2. Dispute over reimbursement of establishment charges due to shortage of staff at the jetty.
3. Petitioner's request to switch from establishment charges to Merchant Overtime Charge.
4. Department's contention regarding the petitioner's agreement to the terms of the notification.
5. Examination of the department's handling of staff deployment and consideration of switching to MOT regime.

Analysis:

1. The petitioner, a company operating a private jetty, faced difficulties due to a notification issued under the Customs Act designating the jetty area as customs territory. The notification imposed conditions, including the custodian bearing establishment charges for custom staff. The Deputy Commissioner was to decide staff deployment based on workload at the jetty.

2. Despite extensions of the notification, the petitioner operated the jetty at limited capacity due to global economic conditions. The department faced staff shortages, leading to a temporary arrangement for staff deputation when needed. The petitioner sought a shift from establishment charges to Merchant Overtime Charge due to the situation.

3. The petitioner contended that demands for full reimbursement were unjustified as the department could not provide full staff at the jetty. The petitioner emphasized the ongoing request for a change to the MOT regime, which the department had not addressed.

4. The department argued that the petitioner had agreed to the terms of the notification and had cleared past dues during renewals. The department opposed the petitioner's attempt to evade liability at a later stage.

5. The court noted that while the petitioner agreed to bear establishment charges, staff deployment was subject to workload considerations. Correspondence revealed the department's acknowledgment of staff shortages and contemplation of allowing the petitioner to switch to MOT charges. The court directed the department to examine staff deployment shortages from a specified period and consider adjusting the establishment charges accordingly. The petitioner was instructed to formally request a regime change to MOT, to be expedited and preferably decided before a set date.

This detailed analysis of the judgment highlights the key issues, arguments presented, and the court's directions, providing a comprehensive understanding of the legal proceedings and the resolution of the dispute.