2017 (3) TMI 628 - AT - Customs

Exemption from Cost Recovery Charges - The Original Authority further held that as the appellants have not paid the Cost Recovery Charges, their application for exemption cannot be considered. - Held that - the jurisdictional Commissioner has not followed the required process of examining the exemption already granted or waiver available to the appellant from Cost Recovery Charges for various periods, year-wise as per existing guidelines. It is clear that deployment of staff and eligibility of the appellant for exemption from Cost Recovery Charges are to be considered and decided only by the Ministry - The denial of exemption to the appellant on the ground that the due application was not filed in time and the matter was not followed-up is not justifiable. In any case, the matter has to be considered by the competent authority, namely the CBEC, Ministry of Finance, and not by the Commissioner - appeal allowed by way of remand.

Summary

Issues:
Liability of appellant to pay Cost Recovery Charges for the period 1.4.2009 to 31.12.2012.

Analysis:

1. The appeal concerns the liability of the appellant to pay Cost Recovery Charges for the period 1.4.2009 to 31.12.2012, amounting to ?4,12,94,397. The Commissioner insisted on full recovery of this amount with interest, based on the guidelines issued by the Ministry of Finance and the Customs Act, 1962.

2. The Original Authority held that the appellant must pay the full amount as per the guidelines, which required payment to be made for the defaulted year before considering any exemption. The Authority emphasized that exemption from payment of Cost Recovery Charges is not automatic and must be sought following the prescribed procedure.

3. The appellant's counsel contested the decision, citing previous communications and exemptions granted by the Ministry of Finance exempting ICDs from such charges. The counsel argued that the appellant's ICD was listed for exemption and that the posts sanctioned in 2001 had been absorbed into the Department by 2009.

4. The Tribunal noted that the Commissioner had not followed the required process of examining the exemption granted or waiver available to the appellant as per existing guidelines. It was observed that the Commissioner's decision to confirm the Cost Recovery Charges without due consideration of the Ministry's guidelines and exemptions was not legally sustainable.

5. The Tribunal emphasized that the eligibility for exemption and the decision on Cost Recovery Charges lie with the Ministry, specifically the CBEC, and not the Commissioner. The Tribunal concluded that the denial of exemption based on procedural grounds was unjustifiable, and the matter should be decided by the competent authority after a proper examination.

6. Consequently, the Tribunal set aside the impugned order and remanded the matter back to the Original Authority for a fresh decision after consulting the competent authority. The Tribunal directed the Commissioner to present all records before the competent authority for a proper decision on the appellant's liability for Cost Recovery Charges.

This detailed analysis of the judgment highlights the key issues, arguments presented, and the Tribunal's decision, ensuring a comprehensive understanding of the legal aspects involved in the case.