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TMI Blog2023 (8) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... also does not form as a precondition for non-eligibility of exemption from 1st April 2020 and in any case delay in payment would not amount to non-payment of dues. It is also worth noting that the Respondents have not shown us any document which states that if there is a delay in clearing dues the exemption would not be granted for the period of delay and, therefore, the contention of the Respondent on this account does not survive. Even otherwise, admittedly all the dues were cleared before Circular No. 2/2021 was issued and even application was made much before the said circular and, therefore, even on this account Respondents contention fails on this account. It is also to be noted that when application was made in January 2020, there was no outstanding dues since the Petitioner had paid all the dues upto December 2019, which is not disputed by the Respondents. The undertaking given on 24th December 2019 by the Petitioner that they will pay all dues was on the premises that they will get exemption from January 2020 when first time application was made and when in fact as stated above there was no outstanding or demand notice. The issue arose before the Gujarat High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st August 2017, Respondent No. 3 issued a further Notification No. 10/2017 appointing the Petitioner to be a Custodian of the imported goods received at the CFS of the Petitioner. The Petitioner was also approved as Customs Cargo Service Provider under the said notification. The duration for which the Petitioner was appointed as Custodian and as a Customs Cargo Service Provider was for two years from the date of the notification dated 21st August 2017. (iv) On 7th November 2017, Respondent No. 3 issued a public notice notifying the Petitioner as Customs Cargo Service Provider w.e.f. 7th November 2017. (v) On 16th January 2020, an application was made by the Petitioner to Respondent No. 4 seeking exemption of Cost Recovery Charges in respect of CFS since the Petitioner completed two years of service (from 7th November 2017) and the Petitioner had paid all dues with respect to cost recovery for the said two years. The said application was made pursuant to a Circular No. 13/2009-Customs dated 23rd March 2009. (vi) On 18th February 2020, Respondent No. 3 informed the Petitioner that precondition for seeking exemption as per para 5.5 of Circular No. 13/2009-Customs is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covery charges. Para 8 of the said circular deals with eligibility for exemption for cost recovery charges. It states that the cost recovery post should have the Department of Expenditure s specific permission for continuation before seeking/claiming exemption in respect of any given customs facility. Para 8.2 provides for exemption from payment of cost recovery charges upon fulfilling the performance criteria given in the table therein. The period for meeting the criteria was two financial years or four financial years as the case may be. Para 8.5 of the said circular states that in respect of all the cases for which exemption from cost recovery charges have not yet been granted though, application for the same is received and all other cases for which application would be received hereafter shall be subject to the conditions specified therein. Para 8.6 lays down that regulation process and approval shall be completed within a period of three months in order to enable the exemption to be available from the beginning of the fourth month. (xi) On 29th June 2021, Respondent No. 3 issued a demand notice to the Petitioner for payment of cost recovery charges for the period of 1st Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot considered till July 2020. The Respondents also relied on an undertaking of the Petitioner dated 4th May 2020, wherein, they had undertaken to pay all the arrears for the Cost Recovery Charges as per demand notice issued by customs. The Respondents relied upon Circular No. 2/2021-Customs dated 19th January 2021 to justify the grant of exemption w.e.f. 19th April 2021. 6. REJOINDER OF THE PETITIONER :- In rejoinder, the Petitioner stated that Circular No. 2/2021-Customs should be read to have application prospectively and not retrospectively. The Petitioner further contended that at no point of time, the Respondents intimated that the claim of exemption is not being considered on account of non-payment of dues and it is only in reply to the present petition that the said case is made out. The Petitioner stated that payment of Cost Recovery Charges (CRC) as a condition for granting exemption was introduced for the first time in Circular No. 2/2021-Customs dated 19th January 2021 and same was not a condition in Circular No. 13/2009-Customs dated 23rd March 2009 and in any case delay in payment would not amount to non-payment of dues. 7. We have heard learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not attributable to the Petitioner. 10. It is settled position that the circulars cannot be given effect retrospectively unless expressly provided therein and if the law so permits. The circular dated 19th January 2021 revamps various circulars issued from time to time and a totally new set of guidelines are issued for dealing with Cost Recovery Charges, Exemption, etc. The eligibility condition as per Circulation No. 2/2021-Customs itself has changed drastically compared to the eligibility condition specified in Circular No. 13/2009-Customs. The Circular No. 2/2021-Customs specifies meeting of criteria I and criteria II in preceding two financial years or anyone of the criteria in the preceding four financial years for being eligible to claim exemption. The criteria I and criteria II deals with volume/ value of cargo/fights and number of documents/passengers handled in a year. These criterias were not present in 2009 circular, therefore, in our view, Circular No. 2/2021 could not be made applicable retrospectively to the application made by the Petitioner on April 2020 seeking exemption. In our view, para 8.5 of Circular No. 2/2021-Customs which provides that the application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver. In the instant case, the Petitioner has made all the payments upto March 2020 albeit delayed. 14. Para 13 of Circular No. 2/2021 states that earlier circular to the extent of its inconsistency with Circular No. 2/2021 would continue to apply. This shows that Circular No. 2/2021 is not retrospective in its application. 15. It is also to be noted that when application was made in January 2020, there was no outstanding dues since the Petitioner had paid all the dues upto December 2019, which is not disputed by the Respondents. The undertaking given on 24th December 2019 by the Petitioner that they will pay all dues was on the premises that they will get exemption from January 2020 when first time application was made and when in fact as stated above there was no outstanding or demand notice. 16. The view which we have taken above is supported by the decision of the Gujarat High Court in case of Adani Ports and Special Economic Zone Limited Anr. Vs. Union of India Ors. in Special Civil Application No. 4083 of 2016 dated 4th December 2017 . The issue before the Gujarat High Court was identical to the issue which is posed for our consideration in the present petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on within 60 days. Any such report of the Commissioner would have to be processed minutely by the concerned departments and this would take a reasonable time. The circular never intended that during all this while even if a particular entity is entitled to exemption, such exemption would be denied for the period during which the authorities i.e. the Commissioner and the concerned department take time to process the data and come to a definite conclusion. Further, para 6 itself provides that similar exercise would be undertaken in April of every year. Even otherwise, no such exercise can be undertaken prior to month of April since it is the cargo handing over the last two years a sea port for the purpose of clause (2) of immediately preceding year which would decide its eligibility for grant of exemption. The data for such period would be available only after 31 st March of a particular year. The question of grant or non-grant of exemption from payment of cargo handling charges would relate to a beginning of the financial year and can be examined only after the end of the previous financial year. No intention appears from the circular that year after year every port would lose the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation was pending, the petitioners were never conveyed that such application shall not be processed, entertained or granted since the current charges are not paid. It is part of the record that once the petitioners through show cause notice were called upon to make such payments, the same were made without delay. If the stand of the department therefore was that even for the period during which the petitioners had applied for exemption, till such exemption is not granted, the petitioners must go on depositing the charges as scheduled, the department should have conveyed the same to the petitioners. One way of looking at condition contained in clause (c) of para 5 is that at the time of making of the application, no past charges should be pending. If the stand of the Government of India was and a stand which may even be plausible, that awaiting outcome for application of exemption, the custodian should continue to deposit such amount with the Government, it should have specified the stand with the petitioners. 22. In the result, petition is allowed. The condition of grant of exemption under impugned order dated 15.12.2015 of the exemption being available from the date of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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