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TMI Blog2019 (12) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... mance within the initial two years. As the appellant has achieved the bench mark performance, in that circumstance, the Revenue is duty bound to examine the issue and disposed of the claim of waiver failing which the Revenue cannot continue to demand of cost recovery charges from the appellant. On perusal of the said provision, the CFS is required to pay the cost recovery charges at rate and manner specified by the Ministry. As, no manner or rate has been prescribed under the regulation or any other way subsequent to the regulation, in that circumstance, we are of the view that cost recovery charges cannot be demanded from the appellant. Respondent during 2008-2010 achieved benchmark performance and instructions of 2005 as well 2009 nowhere require filing of application by CFS seeking waiver of cost recovery charges. As per instructions no dues should be pending on 31.8.2005 and it is not case of Appellant that anything was pending against Respondent on 31.8.2005. Even otherwise, the Respondent cleared dues of 2008-10 prior to notice dated 04.06.2012(Annexure A-1) issued by Appellant. Prior to 2009 only instructions were holding the field and Respondent-CFS cannot be asked to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired under CBEC s Circular No. 13/2009-Cus dated 23.03.2009 read with Ministry s letter dated 12.09.2005? 3. Mr. Amit Goyal, counsel for the Appellant contended that even after introduction of Handling of Cargo in Customs Area Regulations, 2009 (for short 2009 Regulations ) earlier instructions directing payment of cost recovery charges continued to remain in operation and Respondent being Container Freight Station (for short CFS ) was bound to pay cost of Customs Officers posted at its container freight station. He further contended that as per instructions dated 12.09.2005, waiver from cost recovery charges is available if benchmark performance is achieved and no cost recovery charges are under dispute or pending. The Respondent did not pay cost recovery charges of 2008-2010 and no application seeking waiver was filed, thus Respondent was bound to pay cost recovery charges for the period 01.03.2010 to 31.03.2012. 4. Mr. Jagmohan Bansal, counsel for the Respondent contended that after introduction of 2009 Regulations, the Government was bound to specify Rates and Manner of cost recovery charges and in the absence of any notification specifying rate and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery charges in future. The relevant extracts of impugned order are reproduced here under: 6. On careful consideration of the submissions made by both sides, we find that short issue involved before us: (a) Whether the appellant is entitled for exemption from payment of cost recovery charges for March, 2010 or not? And (b) Whether the appellant can be held responsible for non-payment of cost recovery charges when no calculation was made by the Revenue? 7. We find that the appellant started working as CFS with effect from 1-3-2008 and as per instruction dated 14-12-1995 read with Circular No. 52/97-Cus., dated 17-10-1997, a CFS is required to deposit in advance the cost recovery charges. It is fact on record that cost recovery charges are to be calculated by the Revenue, the appellant cannot pay cost recovery charges without calculation of demand of cost recovery charges payable by the appellant. Therefore, we hold that in the absence of any calculation of the demand made by the Revenue, the appellant cannot be responsible for non-payment of cost recovery charges. We find that as per C.B.E. C. circular dated 12-9-2005, if CFS achieved be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the second Gannon Dunkerley case including apportionment of the cost of establishment, other expenses and profit earned by the service provider as is relatable only to supply of labour and services. And, where value is not determined having regard to the aforesaid parameters, (namely, in those cases where the books of account of the contractor are not looked into for any reason) by determining in different works contracts how much shall be the percentage of the total amount charged for the works contract, attributable to the service element in such contracts. It is this scheme and this scheme alone which complies with constitutional requirements in that it bifurcates a composite indivisible works contract and takes care to see that no element attributable to the property in goods transferred pursuant to such contract, enters into computation of service tax. 33. Section 13(3) of the Central Sales Tax Act says:- The State Government may make rules, not inconsistent with the provisions of this Act and the rules made under sub-section (1), to carry out the purposes of this Act. 34. In the aforesaid judgment it was found that Section 9(2) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a firm is dissolved, the Assessing Officer shall make an assessment of the total income of the firm as if no such dissolution had taken place and all the provisions of the Income Tax Act would apply to assessment of such dissolved firm. Interestingly enough, this provision is referred to only in the minority judgment in M/s. Murarilal s case (supra). The impugned judgment in the present case has referred to Ellis C. Reid s case but has not extracted the real ratio contained therein. It then goes on to say that this is a case of short levy which has been noticed during the lifetime of the deceased and then goes on to state that equally therefore legal representatives of a manufacturer who had paid excess duty would not by the self-same reasoning be able to claim such excess amount paid by the deceased. Neither of these reasons are reasons which refer to any provision of law. Apart from this, the High Court went into morality and said that the moral principle of unlawful enrichment would also apply and since the law will not permit this, the Act needs to be interpreted accordingly. We wholly disapprove of the approach of the High Court. It flies in the face of first principle when ..... X X X X Extracts X X X X X X X X Extracts X X X X
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