TMI Blog2014 (2) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... t a fee is a charge for special services rendered to individuals or organizations by some governmental agency or the other and such a charge has an element of quid pro quo ingrinded into it. It is true, that there is no grave distinction between a tax and a fee since both are compulsory exactions of money by public authorities. However, it will be appropriate to bear in mind that a tax is imposed as part of the scheme to garner revenue by the State or public authority for purposes of expending it to achieve and implement public purposes. Consequently, a tax is seldom supported by any considerations. With the expansion or advent of quality infrastructural inputs such as roads, highways network, etc., rapid industrialization and manifold increase of commercial activities can be expected as the most inevitable corollary. Industrialization and increased commercial activities can lead to increase of import and export activity. Both imports and exports of goods are subject to levy of duty. Thus, in the process, the State’s revenue gets augmented, apart from increased economic activity and development of human resources. The increase in the quantum of imports and exports therefore has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri N. Sumanth Reddy and P. Vijay Kumar, Counsels, for the Petitioner. Shri A. Rajasekhar Reddy, SC, for the Respondent. ORDER With a view to cater to the ever increasing local demands and to provide top class infrastructural facility, a new Green Field International Airport at Hyderabad on Public-Private Participation basis has been conceived. The writ petitioner was declared as the preferred bidder, after following the usual tendering process, resulting in execution of a concessionaire agreement on 20-12-2004 between the Government of India, Ministry of Civil Aviation and the writ petitioner company for development, construction, operation and maintenance of the Green Field Airport at Shamshabad near Hyderabad. This arrangement gave birth to Rajivgandhi International Airport at Shamshabad. At all the airports, Customs, Immigration, Security and Quarantine services are performed by various officials belonging to the respective Departments of the Government of India. Clearing international passengers at the Passenger Terminal is performed by the Customs Officials. Similarly, the international cargo imported or meant for export through the air cargo complexes creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, at such customs area, on cost recovery basis, by the Commissioner and shall make payments at such rates and in the manner prescribed, unless specifically exempted by an order of the Government of India in the Ministry of Finance. 3. Similarly, Regulation 6 which dealt with the responsibility of customs cargo service provider required in Clause (1)(o) thereof, to bear the cost of customs officers posted by the Commissioner of Customs on cost recovery basis and shall make payments at such rates and in the manner specified by the Government of India in the Ministry of Finance unless specifically exempted by an order of the said Ministry. Circular No. 13/2009-Customs was issued by the Central Board of Excise Customs on 23-3-2009. It is noted in the said circular that the Public Accounts Committee (2005-2006) in its 27th report had recommended for formulating appropriate legal provisions and guidelines to control the activities of the custodians. In paragraphs 5.3 and 5.4 of the said circular, the following guidelines have been indicated : 5.3 The charges in respect of the Customs officers deployed at the customs clearance facility (ICD/CFS/port/airport, etc.) are required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 2(14) dutiable goods means any goods which are chargeable to duty and on which duty has not been paid; Section 2(15) duty means a duty of customs leviable under this Act; Scction 2(16) entry , in relation to goods, means an entry made in a bill of entry, shipping bill or bill of export and includes in the case of goods imported or to be exported by post, the entry referred to in Section 82 or the entry made under the regulations made under Section 84; Section 2(23) import , with its grammatical variations and cognate expressions, means bringing into India from a place outside India Section 2(24) import manifest or import report means the manifest or report required to be delivered under Section 30 Section 2(25) imported goods means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption; Section 2(32) prescribed means prescribed by regulations made under this Act; Section 2(35) regulations means the regulations made by the Board under any provision of this Act; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export goods shall be loaded, at any place other than a place approved under clause (a) of section 8 for the unloading or loading of such goods. Section 34. Goods not to be unloaded or loaded except under supervision of customs officer. - Imported goods shall not be unloaded from, and export goods shall not be loaded on, any conveyance except under the supervision of the proper officer : Provided that the Board may, by notification in the Official Gazette, give general permission and the proper officer may in any particular case give special permission, for any goods or class of goods to be unloaded or loaded without the supervision of the proper officer. Section 45. Restrictions on custody and removal of imported goods. - (1) Save as otherwise provided in any law for the time being in force, all imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the Commissioner of Customs until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII. (2) The person having custody of any imported goods in a customs area, whether under the provisions of sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y him specifying the amount due from such person and send it to the Collector of the district in which such person owns any property or resides or carries on his business and the said Collector on receipt of such certificate shall proceed to recover from such person the amount specified thereunder as if it were an arrear of land revenue; or (ii) the proper officer may, on an authorisation by a Commissioner of Customs and in accordance with the rules made in this behalf, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after any such distress, may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and shall render the surplus, if any, to such person : Provided that where the person (hereinafter referred to as predecessor), by whom any sum payable under this Act including the amount required to be paid to the credit of the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :- (a) the manner of determining the transaction value of the imported goods and export, goods under sub-section (1) of Section 14; (b) the conditions subject to which accessories of, and spare parts and maintenance and repairing implements for, any article shall be chargeable at the same rate of duty as that article; (d) the detention and confiscation of goods the importation of which is prohibited and the conditions, if any, to be fulfilled before such detention and confiscation and the information, notices and security to be given and the evidence requisite for the purposes of such detention or confiscation and the mode of verification of such evidence; (e) the reimbursement by an informant to any public officer of all expenses and damages incurred in respect of any detention of any goods made on his information and of any proceedings consequent on such detention; (f) the information required in respect of any goods mentioned in a shipping bill or bill of export which are not exported or which are exported and are afterwards re-landed; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f documents, furnishing of duplicates of documents, issue of certificates, and supply of statistics, and for rendering of any services by officers of customs under this Act; (ii) that any person who contravenes any provision of a rule or regulation or abets such contravention or who fails to comply with any provision of a rule or regulation with which it was his duty to comply, shall be liable to a penalty which may extend to fifty thousand rupees. 6. A detailed counter affidavit has been filed resisting the claim of the writ petitioner. The central theme of the case of the respondents is that, for purposes of rendering service of customs clearance at the new Green Field Airport established by the petitioner, at Shamshabad, Hyderabad, additional staff have been sanctioned and they, in turn, have been rendering services to the petitioner and hence there is every justification for the Costs Recovery insisted upon by the respondents. It is also pointed out that the guidelines which have been framed for purposes of appointing the custodians have stipulated unconditional acceptance for cost recovery of the customs staff and hence the petitioner cannot seek to resile from such an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms airport or entrustment of the custodial services can also be recalled at any time later on for valid reasons. Therefore, it could be legitimate to expect the appointee under Section 7 and as well as the custodian under Section 45 to pay for a fees prescribed for appointment as such. A look at Section 141 of the Act in no uncertain terms makes the position clear that all conveyances and goods in a customs area shall be subject to the control of the officers of the customs for purposes of enforcing the provisions of the Act. Otherwise, it might possibly lead to easy evasion of the levy liable to be applied on them. Sub-section (2) of Section 141 makes it explicitly clear that the imported or export goods may be received, stored, delivered, dispatched or otherwise handled in a customs area in such manner as may be prescribed and the responsibilities of persons engaged in the aforesaid activities shall be such as may be prescribed. The expression prescribed was defined in Section 2(32) as meaning those as prescribed by the regulations made under the Act. Even if Sections 7, 45 and 141 are read together, what emerges is that, all goods imported or meant for export can be brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by levying duty on imports and exports. The invisible roots of this legislation lie in the State s primary obligation to nurture and protect the indigenous industrial sector from facing or measuring up to international standards and unhealthy competition. Further, India cannot be a free for all dumping yard . Otherwise giant multinational corporations would not allow sun to shine on our local corporations and consequently continue to exploit the local conditions and turn them in their favour. More importantly the natural resources of this nation move away across it s borders, for the good and welfare of others and they will scarcely become available for securing the wellbeing of our countrymen. The very foundations upon which this nation won its freedom would have been quickly weakened, otherwise. 11. Regulation 5(2) of Regulations, 2009 undoubtedly prescribed the custodian to bear the costs of the customs officers posted at such customs area on cost recovery basis. Now the question that is to be resolved is whether this falls within the general power of making regulations or not? Payment of one-time fee for appointment as a customs airport or for recognizing a person as a custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of taxes, they make it their business to walk outside them. 14. However the limits of the right of the public authority to impose taxes lies with the Legislature, as taxation is the very prerogative of the Legislature. Hence the right to impose taxes and to determine the circumstances under which these will be done is the very privilege of the legislative power while mere administration of such a taxation statute is the responsibility of the executive power of the State. It is a common legislative practice to prescribe for the legislative policy broadly in the statute and then leave the guidelines for working out the details effectively behind the said legislative policy by delegating the power to frame rules or regulations, as the case may be. This practice of empowering the executive to make supporting Legislation strictly within the prescribed sphere has been evolved due to the practical necessities and pragmatic needs of the modern state as the Legislatures, by the very nature of the limitations upon them to conceive all possible circumstances and contingencies at one go and also because of the extremely limited time factor. The Legislatures can hardly work out all the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... features of a tax this definition also assists in distinguishing a tax from a fee. It is true that between a tax and a fee there is no generic difference. Both are compulsory exactions of money. By public authorities; but whereas a tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. If specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area, and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee. Tax recovered by public authority invariably goes into the Consolidated Fund which ultimately is utilised for all public purposes, whereas a cess levied by way of fee is not intended to be, and does not become, a part of the Consolidated Fund. It is earmarked and set apart for the purpose of services for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrialization and manifold increase of commercial activities can be expected as the most inevitable corollary. Industrialization and increased commercial activities can lead to increase of import and export activity. Both imports and exports of goods are subject to levy of duty. Thus, in the process, the State s revenue gets augmented, apart from increased economic activity and development of human resources. The increase in the quantum of imports and exports therefore has a direct proportionate impact upon the revenue garnering and overall development. As was already noticed supra, appointment of a custodian of the customs space identified under Section 8 of the Act is only for ensuring the integrity of such a place so that no revenue loss and duty evasion occurs there. Beyond that, a custodian has no other role. He is a facilitator by providing for foolproof or tamper proof premises so that goods do not leave the premises before they are cleared by the customs and correspondingly the necessary duty/revenue is collected smoothly by the State. It is purely incidental, that the custodian may in turn earn some revenue for himself by charging the importer or exporter for facilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... todian is required to provide the necessary infrastructural facilities. Sans such facilities, the customs clearance duties become imminently impaired. Therefore, while a demand for making available standard infrastructural facilities for facilitating efficient discharge of customs clearance functions is legitimate, but however, demand of reimbursement of cost recovery is totally unjust. There is yet another reason while preparing the appropriation estimates of revenue, adequate provision is always made towards the Head of salaries and allowances payable to the Government servants functioning under various Ministries/Departments. Such appropriations are placed for consideration and approval of the Parliament/Legislature of the State as the case may be. Once the salaries and allowances and other benefits such as pensions are thus already provided for, the question of seeking their reimbursement separately would not arise. Out of the overall collection of revenue, a certain percentage is thus set apart towards the concomitant expenditure liable to be incurred for raising such revenue. Salaries and allowances, pensions and other terminal benefits payable to the Government servants ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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