TMI Blog2017 (12) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... that no cost of recovery charges shall be outstanding. The reference to no cost recovery charges shall be outstanding also has a bearing on this aspect of the matter. If on one hand, the Government of India expects that the custodian should pay up the charges and not be in arrears of such charges, when the application for exemption is being processed, the contention that such exemption even if later on granted, would only be prospective, would be incongruent. On one hand, the custodian would have to, pending finalization of the application for exemption, go on depositing the recurring charges with the Government of India, failing which, he would be stated to be breaching condition contained in clause (c) of para 5 of the circular, and on the other hand when such application is granted, the custodian would be told that no refund can be granted for such charges already deposited since the exemption is always prospective. Grant of exemption from the date of the application, if the application is in order and no delay can be attributed to the petitioners in either making the application or supplying necessary information to the department, cannot be stated to be retrospective opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Port and the petitioners have been declared as a custom cargo service provider in terms of regulation 2(b) of Handling of Cargo in Customs Areas Regulations, 2009. Since the petitioners provide cargo services at the Mundra port which is managed by the petitioners, the Government of India is required to deploy custom staff at the said port for assessment, levy and collection of taxes. In this petition we are concerned with the liability of the petitioners to pay to the Government of India the charges for deployment of such staff which is referred to as cost recovery charges . The petitioners in the present petition do not dispute their liability otherwise to pay such charges. It is however, also not in dispute that the Government of India issued a circular dated 10.04.2013 granting exemption to the cargo service providers from payment of cost recovery charges, subject to fulfillment of conditions laid down therein. From the circular, one gathers that a committee of the Chief Commissioners was constituted for identifying the performance benchmarks that would make a particular facility eligible for grant of exemption for the customs staff posted at various privately managed ports. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Sea Ports, Air Cargo Complexes, Courier Terminals, Diamond Plazas and number of international flights and number of passengers in case of Airports must be met in each of the preceding two financial years. ( b) Exemption from cost recovery charges shall be prospective; and ( c) No cost recovery charges should be outstanding. 6. It has also been decided that based upon the aforementioned norms, jurisdictional Commissioners would review the existing facilities and send proposals for waiver of cost recovery charges for eligible facilities within 60 days . The proposal shall be sent to DG, HRD, CBEC. Thereafter, similar review would be undertaken in April each year and proposals for waiver of cost recovery charges sent to DG, HRD, CBEC by 30th April, DG, HRD, CBEC will process the proposals to ensure the necessary orders for exemption of cost recovery charges and regularization of posts are got issued in a time bound manner. 5. We would peruse the circular more minutely at a later stage. A cursory glance at this stage would demonstrate that the Government of India decided to grant exemption to the cargo service providers from payment of cost recovery ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e these internal communications, the exemption as applied for by the petitioners did not comeforth immediately. In the meantime, it appears that the petitioners had not paid the recurring cargo handling charges. The Commissioner of Customs, Mundra, therefore, issued a show cause notice dated 16.03.2015 calling upon the petitioners why the cost recovery charges of ₹ 11,14,86,640/which have remained unpaid post March, 2013, should not be recovered with penalty and other consequences. Another similar show cause notice dated 18.11.2015 came to be issued seeking further cost recovery charges of ₹ 4,64,74,327/. We are informed, thereupon the petitioners cleared all these charges. 8. On 15.12.2015, the Chief Commissioner conveyed to the petitioners that it has been decided to exempt the cost recovery charges for the sanctioned strength of the staff. This was however subject to fulfillment of following conditions: ( a) Exemption from payment of cost recovery charges would be prospective. ( b) Further continuance of the exemption shall be made by the CBEC on receipt of a certificate from the respective jurisdictional Commissioner to the effect that the performanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he exemption for SSI units would be made available to such a unit from the date of the application for registration. II. In case of Santdas Idanmal Company v. Union of India reported in 1981 (8) E.L.T. 561 (Del.), in which, the learned Single Judge of the Delhi High Court held that revalidation of Quota Transfer Certificate would take effect from the date of reconstitution of the firm. III. In the decision of the Delhi Bench of CEGAT in case of Commissioner of C. Ex., Cochin v. Poulose Matthen reported in 2001 (137) E.L.T. 1184 (TriDel), in which, it was held that the classification of goods would relate back to the date of filing of classification list. It was pointed out that such decision was approved by the Supreme Court. 12. On the other hand, learned advocate Shri Sudhir Mehta for the department opposed the petition contending that in terms of circular dated 10.04.2013, grant of exemption from payment of cost recovery charges was subject to fulfillment of certain conditions. First condition was that such exemption would be prospective and the second condition was that no charges should be outstanding. In case of the petitioners, after 01.04.2013, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prospective and that no cost recovery charges of the past should be outstanding. As per para 6, the jurisdictional Commissioner would undertake the exercise of reviewing the existing facilities and send the proposal for waiver of the cost recovery charges for the eligible facilities within 60 days. Similar review should be undertaken in April of each year. 15. Two things emerge from para 6 of the circular. One is that the Commissioner would undertake a review of the existing facilities and would send proposal for grant of exemption to the extent of eligible facilities which would have a direct bearing on the cargo i.e. value and volume of the import/export and number of shipping bills handled by the seaport which would be done within 60 days from the date of the circular . Similar exercise would be undertaken in April of each year. 16. It is not in dispute that in case of the petitioners, the necessary requirements of minimum handling of cargo and shipping bills were satisfied for the sanctioned staff deployed at the port. It is not even the case of the department that looking to the value/volume and number of shipping bills through seaport in last two preceding years, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which would decide its eligibility for grant of exemption. The data for such period would be available only after 31st March of a particular year. The question of grant or nongrant 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 exemption from the period during which such exercise is undertaken and completed. The purpose of mentioning that the exemption shall be prospective was to ensure that no entity can claim such exemption for a period prior to the date of the circular or for a period prior to the application for such period i.e. the period under review for exemption. 19. The reference to no cost recovery charges shall be outstanding also has a bearing on this aspect of the matter. If on one hand, the Government of India expects that the custodian should pay up the charges and not be in arrears of such charges, when the application for exemption is being processed, the contention that such exemption even if later on granted, would only be prospective, would be incong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 21. One more ground raised in the affidavit in reply to oppose the petition is that additional staff was deployed at the port which consumed some time since large number of similar applications were received from various regions in the country. We are not finding any fault with the Government of India in consuming some time in deciding the petitioners' request for exemption. However, once such application is accepted in facts of the present case, the exemption should have been granted from the date of the application. If the unspecified contention in this respect is that the performance benchmark of the petitioners for the last two preceding years was not examined in light of the additional sanctioned strength, no such reference is available from the order. In plain terms in the order, the Government of India agrees that the petitioners fulfilled the necessary performance benchmark provided in circular dated 10.04.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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