2023 (8) TMI 952 - HC - Customs

Exemption to the Petitioner from payment of Cost Recovery Charges w.e.f. 19th April 2021, although, the application for exemption was made in April 2020 - HELD THAT - The Respondents have not alleged that the Petitioner is not eligible for grant of exemption as per Circular No. 13/2009. Para 5.5 of Circular No. 13/2009 deals with eligibility for grant of exemption, namely the CFS is in existence for a consecutive period of two financial years and parameters such as total number of import or export containers handled, customs declaration fled for import or export, etc. are satisfied. The Respondents have not averred that any of the conditions specified in para 5.5 of Circular No. 13/2009 is not complied by the Petitioner. The delay in payment of Cost Recovery Charges 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 Court in case of Adani Ports and Special Economic Zone Limited Anr. Vs. Union of India Ors. 2017 (12) TMI 676 - GUJARAT HIGH COURT as to whether the Revenue was justified in granting exemption from 15th December 2015 and not from the date of the application made by the Petitioners. The Gujarat High Court after analysing the scheme came to the conclusion that the exemption ought to have been granted from the date of the application and not from the date when the Chief Commissioner decided to grant exemption. The fact of the present petition being similar to that before the Gujarat High Court, the analysis done would require to come to a conclusion that the Respondents were not justified in granting exemption w.e.f. 19th April 2021 when the application was made in April 2020. The CRB order No. 5/2021(Exemption) dated 25th April 2021 would be effective from 1st April 2020 and not from 19th April 2021 and, therefore, the Respondents are directed to modify the exemption order granting exemption from payment of Costs Recovery Charges from 1st April 2020 making the Petitioner eligible for exemption from said date that is 1st April, 2020 - Petition allowed.

Summary

Issues Involved:

1. Justification for granting exemption from payment of Cost Recovery Charges from a specific date.
2. Applicability of Circular No. 2/2021-Customs retrospectively.

Summary:

Issue 1: Justification for Granting Exemption from Payment of Cost Recovery Charges from a Specific Date

The petitioner sought an exemption from payment of Cost Recovery Charges effective from 01.04.2020, arguing that the exemption granted by the respondents should be effective from the date of their application in April 2020 rather than from 19th April 2021 as notified. The petitioner contended that they had paid all dues up to March 2020 and had applied for the exemption immediately upon completing the required two consecutive financial years of operation. The respondents, however, granted the exemption effective from 19th April 2021, citing delays in payment and the applicability of Circular No. 2/2021-Customs.

Issue 2: Applicability of Circular No. 2/2021-Customs Retrospectively

The court analyzed whether Circular No. 2/2021-Customs, issued on 19th January 2021, could be applied retrospectively to the petitioner's application made in April 2020. The petitioner argued that the circular should not apply retrospectively and that their application should be considered under the earlier Circular No. 13/2009-Customs. The court agreed, stating that the petitioner's right to exemption crystallized on 31st March 2020 and that the delay in processing the application was not attributable to the petitioner.

Analysis and Conclusion:

The court concluded that the respondents were not justified in applying Circular No. 2/2021-Customs retrospectively and granting the exemption from 19th April 2021. The court held that the petitioner's application should be considered under Circular No. 13/2009-Customs, which was in effect when the application was made. The court cited a similar case from the Gujarat High Court, which supported the view that exemptions should be granted from the date of application if the application was in order and no delay was attributable to the petitioner.

Judgment:

The court directed the respondents to modify the exemption order to make it effective from 1st April 2020. The petition was allowed in these terms, with no order as to costs.