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2023 (10) TMI 447 - GUJARAT HIGH COURTSeeking waiver (exemption) of cost recovery basis - whether the CFS has achieved the bench marking for waiver of cost recovery charges - CFS has operated for two consecutive years from the date of sanction order for creation of posts - conditions as mentioned in instructions issued by GOI on 12.09.2005, fulfilled or not. Case of appellant is that waiver of recovery of charges could not be restricted on the ground that the proposal for exemption from payment of cost can be considered after the CFS has operated for two consecutive years from the date of sanction order for creation of posts which sanction order was dated 18.03.2020. HELD THAT:- The petitioners on 12.05.2008 made an application for establishment of a service unit at Mundra. By a notification dated 19.08.2011, in exercise of powers under Rule 11(11) of the Rules, the entire area of the CFS of the petitioner company was designated as Landing Place for unloading of imported cargo and loading of export goods meant for both SEZ and DTA. By a notification no. 2/2016-17, the office of the Principal Commissioner of Customs appointed the petitioner company as a Custodian of such cargo in accordance with the notification dated 19.08.2011 on certain conditions. Reading the aforesaid condition would indicate that the posting of custom officials at the CFS of the petitioner company, the petitioners had to bear costs of the custom officials posted at the station of the petitioners. This was on a cost recovery basis and the payments were at such rates and the manners specified by the Government of India. Reading of the notification dated 12.09.2005 would indicate that it deals with waiver of payment of cost recovery charges in respect of CFS. Reading the communication would indicate that the authorities considered regularization of those cost recovery posts at ICDs/CFS which have been in operation for two consecutive years with following performance benchmarks for the past two years. In case of the petitioners , admittedly, for the two yeas i.e. 2017-18 & 2018-19 the benchmark beyond 1200 for handling containers and as far as the number of bills of entry and shipping bills has been complied with. In the impugned communication, it is the case of the respondents that since the sanction of such posts was with effect from 18.03.2020 the waiver can be considered only after two years from such date and on fulfilling the additional conditions as per the circular dated 12.09.2005. Perusal of the records in the petition would indicate that when the sanction was accorded to the petitioner company for operating as a Designated Landing Site in accordance with the notification dated 19.08.2011 on 11.05.2016, on 17.07.2014 the office of the Commissioner of Customs, Kandla on the subject of creation of posts on cost recovery basis had observed that the office was in the process of granting approval as custodian to the petitioner company under Section 45 of the Act. As per para 2(b) of Circular No. 34/2003 dated 24.04.2003, it was mandatory to take prior approval for posting of officers and staff on cost recovery basis in the ICD/CFS. The creation of the requisite number of posts should precede the notification and therefore an approval was sought for. It is undisputed that the petitioners have qualified for waiver of cost recovery charges on completion of two years when in the years 2017-18 and 2018-19 they have achieved the benchmark as stipulated in the circular of 12.09.2005 and therefore the sanction of a post was a matter of internal arrangements between the departments which had no bearing on the cost recovery and/or waiver of such charges. The denial of waiver on the ground that such costs cannot be waived as the posts had not been sanctioned at the relevant point of time certainly is arbitrary and therefore cannot be sustained. The petitioners are entitled to waiver of cost recovery charges in light of circular dated 12.09.2005 with effect from 01.07.2019. Costs recovered towards posting of custom officials at the petitioners’ CFS post 01.07.2019 be refunded to the petitioners - Petition allowed.
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