2017 (3) TMI 771 - AT - Central Excise

Liability of duty - supervision charges - whether the appellants are liable to pay the supervision charges for service of the staff on M.O.T. basis or on the Cost Recovery basis? - Held that - the conclusion drawn by the appellants that the order of the Commissioner allowed them to pay on M.O.T basis for the entire period is erroneous and is not forthcoming from the letter dt. 05.03.1999 - the benefit of M.O.T. basis should be given from the date of the letter of the appellants dt. 14.10.1998 rather than the date of the order of the Commissioner dt. 05.03.1999 - appeal dismissed - decided against appellant.

Summary

Issues:
Whether appellants are liable to pay supervision charges for service of staff on M.O.T. basis or on Cost Recovery basis.

Analysis:
1. The appellant appealed against the order passed by the Commissioner of Central Excise (Appeals), Raigad, Mumbai, regarding the liability to pay supervision charges. The appellant, holding a license for a Private Bonded Warehouse, filed a refund claim for the charges deposited under protest. The Adjudicating Authority rejected the refund claim citing the absence of provisions for refund of Cost Recovery Charges under Section 11B of the Central Excise Act and Section 27 of the Custom Act, 1962.

2. The Commissioner (Appeals) noted that the appellants had requested to pay the warehouse charges on M.O.T. basis, and the Commissioner instructed re-quantification of services on M.O.T. basis. The Commissioner (Appeals) concluded that non-compliance by the lower Authority did not change the legal status, and the condition stood modified since the appellants' application date. The appellants challenged the decision, arguing for the benefit of M.O.T. basis supervision charges from the start of the warehouse.

3. The Ld. Advocate for the appellants argued that the Commissioner (Appeals) exceeded the Commissioner's directions by deciding to recover supervision charges on a Cost Recovery basis. The Ld. Commissioner (Appeals) was supposed to determine the legality of the Assistant Commissioner's order in defiance of instructions. The Tribunal found jurisdiction under Section 35B of the Central Excise Act and referred to a relevant case law.

4. The Tribunal observed that the Commissioner (Appeals) did not exceed the scope of the Assistant Commissioner's order, as the initial license condition was clear about Cost Recovery Charges. The Ld. Commissioner (Appeals) considered relevant facts and concluded that the benefit of M.O.T. basis should apply from the date of the appellants' letter, not the Commissioner's order. The Tribunal upheld the decision of the Ld. Commissioner (Appeals) as fair and reasonable, dismissing the appellant's appeal.

Conclusion:
The Tribunal upheld the decision of the Ld. Commissioner (Appeals) regarding the payment of supervision charges, finding no infirmity in the order. The appeal filed by the appellant was dismissed, and the decision was pronounced in court on 08.03.2017.