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TMI Blog2011 (2) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... d - Therefore, recovery charges will have to be made by them When ICD and CFS are running by Custodians for their own commercial gains and located in the hinterland, the cost recovery charges will have to be paid for the posting of customs officials who are additionally sanctioned for these ICDs and CFS over and above the regular posts - while calculating the cost recovery charges, apart from the cost of the staff includes the component of pay and allowances, contribution of pension will have to be recovered from their salaries. therefore, there was no exorbitant claim in demanding 1.85 times - writ petitions will stand dismissed - 2634-2636 of 2009 - - - Dated:- 4-2-2011 - K. Chandru, J. REPRESENTED BY : Shri S. Murugappan, Counsel, for the Petitioner. S/Shri B. Vijay Karthikeyan and P. Krishnasamy Counsels, for the Respondent. [Order (Common)]. In the first writ petition, the petitioner who had established a Container Freight Station (CFS) at Thoothukudi, filed the writ petition challenging an order, dated 29-1-2009 passed by the Administrative Officer, (Establishment), Customs House at Thoothukudi. By the impugned demand notice, the petitioner was directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the Customs Act and for indemnifying the customs authorities for any loss of duty suffered due to any negligence on the part of the petitioner companies. The establishment of CFS was to facilitate import and export of cargo. The Cargo which are to be exported will be brought to CFS and will be examined by the Customs Officials and thereafter, stuffed into the containers. After completion of customs formalities, they will be allowed for export. Thereafter, the containers will be taken to the gateway port and loaded into ships. Similar reverse exercise will be done in the case of imported cargos. The containers will be brought from the ship to CFS and after unloading it in the specified port, it will be unpacked or de-stuffed. The cargos will be examined by the deputed Customs officials. After verification, they will be released to the importers. 6. By the establishment of CFS and ICD, the exporters/importers will be saving money and time. For providing such facilities, the petitioner companies used to charge certain amount per container. The petitioner in turn was also bound to make payment as cost recovery charge. The cost recovery charges will have to be paid in advance. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices for customs clearance like any other port. They were equipped with fixed installations and offering services for handling temporary storage or import and export laden and empty containers carried under Customs transit by any applicable mode of transit placed under Customs transit. The proposal for setting up CFS either by way of private sector or public sector will be cleared by the Inter Ministerial Committee on the recommendations of the Jurisdictional Commissioner and on the basis of prescribed guidelines. On a letter of intent being granted, an application was required to set up the infrastructures within one year from the date of approval. On being satisfied that there are required infrastructures, a notification under Section 8 of the Customs Act will be issued by the Jurisdictional Commissioner of Customs. The operator of the said CFS are appointed as Custodians under Section 45 of the Customs Act provided they satisfy all conditions and provided an undertaking as required by the circular, dated 14-12-1995 issued by the Central Board of Excise and Customs. Only on fulfillment of these obligations, the Commissioner of Customs, Tiruchirappalli, who is the jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever there was revision of dearness allowance for the Central Government employees, that was also carried out by them. It is only when a pay revision was made by the Central Government for its employees with retrospective effect, the petitioners have come forward to challenge the demand. It is not as if the salaries paid to the Government servants are static. They are liable to be revised from time to time. Therefore, recovery charges will have to be made by them. 11. Mr. S. Murugappan, learned counsel appearing for the petitioners apart from contending that the demand of 185% was exorbitant and not supported by law, further contended that the further demand is also unwarranted. Reliance was also placed upon a judgment of the Kerala Division Bench in W.A. No. 891 of 2005, dated 19-1-2006 in Union of India and Another v. National Tyre and Rubber Company of India and Another. The Division Bench of Kerala High Court in paragraph 2 of its order had observed as follows : 2. The only question to be considered is whether the petitioner is liable to pay the amounts due to the customs staff because of the pay revision. In the Bond executed there is no clause obliging the petitioner to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the requirements of Customs Act will have to be followed. The judgment of Kerala High Court may not have any relevance, as it did not decide the issue relating to cost recovery charges to be met by the custodians. 13. Per contra, Mr. B. Vijay Karthikeyan, learned counsel for the Customs and Central Excise had stated that the contentions raised by the petitioners cannot be accepted. In the CBEC s Customs Manual of instructions, it has been clearly stipulated as follows : Posting of Customs officers on cost recovery basis : 7. For the purpose of Customs clearance at the ICDs/CFSs, Customs staff is provided at the ICD/CFS on cost recovery basis. The sanction for posting of officers is issued by the Administrative Wing of the Central Board of Excise and Customs. The custodians are required to pay @185% of total salary of officers actually posted at the ICD/CFS. Normally, 13 officers (1 Assistant/Deputy Commissioner, 2 Appraisers, 2 Inspectors, 2 UDCs, 2 LDCs, 4 Sepoys) are posted at an ICD/CFS having both import and export. The ICD/CFS having only export is given 7 officers (1 Assistant/Deputy Commissioner, 1 Appraiser, 1 Inspector, 1 UDC, 1 LDC, 2 Sepoys). 8. In the initial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning all the costs incurred by the State Government for the purpose of disbursing pay and other allowances to the government employees posted for supervision, whether recovered in advance or in due course the additional amounts which become recoverable on account of upward revision of pay scales with retrospective effect, because there is no limitation of any kind in Section 58-A of the Prohibition Act to the effect that the costs are to be recovered only in advance, and that too only such costs as could be worked out on the date of demand or to the effect that the burden of additional amounts on account of revision of pay/scales with retrospective effect should not be recovered from the liquor licensee. In our view, there exists full power under Section 58-A of the Prohibition Act itself to levy and recover all costs of supervision and, therefore, no limitation can be read into the power to recover all costs present, future and past which are or were actually incurred by the State Government in view of payments made to be made to its employees posted for excise supervision, in spite of provisions of sub-rule (12) of Rule 17 of the Rules of 1966 and sub-rule (12) of Rule 6 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Prohibition Act and the intention of the legislature, in our opinion, could not be anything other than that the entire cost incurred by the Government on account of pay scales paid to the government employees posted for supervision should be paid by the licensee and that this cost should not be met from the government exchequer. 30. We have already extracted the relevant undertaking that the respondents had given in the application in Form PLA prescribed under the Rules of 1966 and application in Form CLA prescribed under the Rules of 1973. Apart from the undertaking under Condition 17 of the licence in Form CLI for grant or renewal of licence that the orders made from time to time under the Act shall be complied with, sub-rule (43) of Rule 17 of the Rules of 1966 and sub-rule (36) of Rule 6 of the Rules of 1973 also prescribed that the licensee shall abide by the orders made from time to time under the Prohibition Act and these are the provisions which give residuary powers to the petitioners, inter alia, direct to pay the supervision charges. 31. The legal (sic liquor) licensee does not have a fundamental right to deal in liquor. Under Entry B List II in the Seventh Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X
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