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2018 (8) TMI 1610 - HC - CustomsLevy and collection of cost recovery charges from Custom Officers/petitooners - prayers are predicated primarily on the plea that custom officers are permanent employees of the Union of India and duties performed by the custom officials at the ICDs/CFSs/ACCs/EPZs being sovereign functions, no charge could be recovered by the Union of India from the petitioners. Held that:- Petitioners as a pre-condition for becoming custodians of the respective ICDs/CFSs/ACCs/EPZs had willingly undertaken to bear the costs of the Customs staff posted at the ICDs/CFSs/ACCs/EPZs. Thus, the payment of cost recovery charges has sanction and authority of law to back the levy and imposition. Further, the cost recovery charges so levied are against expenses incurred by the government for rendering the services at the ICDs/CFSs/ACCs/EPZs - from provisions of the Act and the documents on record, it is established that cost recovery charges are in the nature of “fee” for services rendered by the customs officers at the concerned ICDs/CFSs/ACCs/EPZs. Whether the government can levy the cost recovery charges at the rate of 1.85 times the salary of the customs officers? - Held that:- The actual cost cannot be restricted and confined to salary paid. There are hidden and other expenses involved. It would be unfair and wrong to compute cost by merely adding the wage or salary actually paid to the custom staff deployed. This is not the actual cost incurred and the cost to the government. The cost factor was worked out on the basis of principles under the General Financial Rules. This assertion and contention of the respondents remains undisputed and unchallenged. In view of the Rules 112 and 113 of the General Financial Rules, recoveries of expenditure of the services rendered to both the government and non-government parties are to be classified as receipts and the entire cost shall be recovered from the public or private body so that the net cost to the government is nil. If the revision in cost due to implementation of the 6th Pay Commission was not carried out, then the government would had suffered a net loss and would have tantamounted and resulted in profiting of the private sector at the expense of the government. Cost recovery @ 185% of the total salary of staff actually posted at ICDs/CFSs/ACCs/EPZs of the petitioners was being done as per the Board's instructions issued under F. No.434/12/92/-CUS dated 05.06.1992, Circular Nos.128/95-CUS dated 14.12.1995, 133/95-CUS dated 22.12.1995, 52/97 dated 17.10.1997 and 80/98-CUS dated 20.10.1998. Customs officers may perform statutory or sovereign functions, however, the sovereign is not liable to provide service and permit setting up ICDs/CFSs/ACCs/EPZs. Additional posts are created/sanctioned for the ICDs/CFSs/ACCs/EPZ for which the developer undertakes to bear the cost of the staff posted. The payment is in the nature of fee for the services rendered - They are therefore bound to bear the cost of the customs staff, posted for the ICDs/CFSs/ACCs/EPZs. The payment of cost recovery charges by the custodian of ICDs/CFSs/ACCs/EPZs has the statutory force of law and is within the jurisdiction of the respondents. No case is made out for the grant of the reliefs as prayed for in the writ petitions - petition dismissed.
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