Tax Management India. Com
        A knowledge portal that keeps us updated ...
TMI - Tax Management India. Com
Case Laws Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Manuals News SMS Articles Highlights
        Home        
 
Extracts
Home List
← Previous Next →

Adani Ports And Special Economic Zone Limited And 1 Versus Union of India And 2

2017 (12) TMI 676 - GUJARAT HIGH COURT

Exemption from payment of deployment of staff - cost recovery charges - Circular dated 10.04.2013. - Held that: - the Government of India, issued a circular providing for exemption from payment of cost recovery charges by the custodians of the ports subject to certain conditions. The basic condition was of satisfying the basic performance norms of minimum cargo and documents handled during a certain period. Such norms would show that for a set up of specified number of officers of specified .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

c) of para 5 imposes an additional condition 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 b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on 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 operation of the order of exemption. - Pending such application for exemption, the custodian cannot discontinue depositing the charges with the Government. In a given case, it may happen that the application is ultimately rejected for valid reasons. It i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f exemption from the date of the application. This is so because admittedly all the while when such application was pending, the petitioners were never conveyed that such application shall not be processed, entertained or granted since the current charges are not paid. - The condition of grant of exemption under impugned order dated 15.12.2015 of the exemption being available from the date of the order is struck down. It is provided that such exemption for payment of cost recovery charges wo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

HI) 1. The petitioners have challenged an order dated 15.12.2015 passed by the Chief Commissioner of Customs, Gujarat Zone, in which he has granted exemption to the petitioners from payment of cost recovery charges which would be effective from the date of the order and not from the date of the application of the petitioners for such purpose i.e. 12.04.2013. 2. Brief facts are as under. 3. Petitioner no.1 is a company registered under the Companies Act. Petitioner no.2 is a shareholder of the pe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n 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 fulfi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the said circular. The relevant portion of the circular concerning the parameters for grant of exemption to the sea ports reads as under: Customs Facility Dy./Asst. Commissioner Appraiser/ Superintendent Inspector/ Examiner STA /TA Sepoy Total Sea Port 2 4 12 2 12 32 Air Cargo Complex 2 8 12 4 5 31 Courier Terminals 4 9 12 4 8 37 Diamond Plaza 1 2 + 2 8 2 4 19 Norms for eligibility for grant of exemption from the payment of cost recovery charges: Facility Minimum Annual Volume/Value of Impor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the circular read as under: 5. The conditions for grant of exemption from payment of cost recovery charges for all facilities viz. Sea Ports, Air Cargo Complexes, Courier Terminals, Diamond Plazas and Airports shall be as follows: (a) Both performance norms i.e. volume/value and number of documents in 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 t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 charges based on its ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lary and waive such salary charges from the cargo service providers. In addition to satisfying these criteria, the person seeking exemption from payment of such charges would have to satisfy two additional conditions. One, both performance norms i.e. volume and value and number of documents in case of sea ports must be met in each of the preceding two financial years. As per clause (b) of para 5, the exemption from cost recovery charges would be prospective. As per clause (c) of para 5, no cost .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

posts in a time bound manner. 6. The petitioners applied to the Commissioner of Customs, Kandla, under letter dated 12.04.2013 for grant of exemption from payment of cost recovery charges in terms of the said circular dated 10.04.2013. The petitioners have produced an interdepartmental communication dated 22.04.2013 in which the Assistant Commissioner of Customs has recorded that the application of the petitioners for waiver of the charges has been verified with the data available and it is fou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ictional Commissioner to the effect that the performance of the particular ICD/CFS/Seaport/Diamond Plazas during the preceding year was in accordance with the prescribed benchmark, and (c) In case any ICD/CFS/Seaport/Diamond Plazas falls to maintain performance as per the prescribed benchmark, in any given year, it shall be liable to pay 1.85 times of the cost of the operational post i.e. customs personnel deputed during that year. 9. The petitioners object to the above noted condition (a) under .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uirement for the petitioners to apply for waiver of the cost recovery charges in terms of circular dated 10.04.2016. The circular provided for an inbuilt mechanism under which, the Commissioner would suomotu examine the requirements of the circular and recommend the case accordingly to the concerned departments who would take a decision based on such report. Even otherwise, the petitioners had without any delay, applied for the exemption on 12.04.2013 itself. No further details or documents were .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

espondents that in view of the outstanding payments for cost recovery charges, application of the petitioners would not be considered for such period. 11. In support of his contentions, counsel relied on following decisions: I. In case of Commissioner of Central Excise v. M.P.V. & Engg. Industries reported in 2003 (153) E.L.T. 485 (S.C.), in which, it was held and observed that upon a unit being registered as an SSI, the exemption for SSI units would be made available to such a unit from the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at 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 sec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f the Bombay High Court upheld the authority of the department to levy cost recovery charges. II. In case of Thiru Rani Logistics Pvt. Ltd. v. Dir. General, DGHRD, C. & C.E., New Delhi reported in 2016 (340) E.L.T. 160 (Mad.), where the learned Single Judge of the Madras High Court held that as long as the order of waiver from payment of such charges is not granted, the custodian is bound to pay the charges. A writ petition seeking stay against such recovery pending the application for waive .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

specified cadres, the seaport should have achieved a minimum volume and the value of import and export cargo. The port should also have minimum number of documents of bills of entry or shipping bills annually. Para 5 of the circular is of utmost important. Clause (a) of para 5 provides that volume/value and number of documents in case of seaports must be met in each of the preceding two financial years. Clause (b) of para 5 provides that exemption from gross recovery charges would be prospectiv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat 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 fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eployed 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 certain staffing pattern was not justified and that therefore either partially or totally the exemption from payment of cargo handling charges was not justified. This is precisely why the department itself granted to the petitioners the exemption from payment of such charges under the order dated 15.12.2015. If this be so, onl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

be outstanding. These two clauses are pressed in service by the department for denying exemption to the petitioners from the date of application. Since these two conditions in some sense overlap, we may examine the applicability and fulfillment of these conditions by the petitioners simultaneously. 18. When clause (b) of para 5 of the circular provides that the exemption from cost recovery charges would be prospective, in our opinion, it never aims to make such exemption available only from the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

during all this while even if a particular entity is entitled to exemption, such exemption would be denied for the period during which the authorities i.e. the Commissioner and the concerned department take time to process the data and come to a definite conclusion. Further, para 6 itself provides that similar exercise would be undertaken in April of every year. Even otherwise, no such exercise can be undertaken prior to month of April since it is the cargo handing over the last two years a sea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e 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 Governme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ined 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 oper .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re correct on the part of the Government of India to insist that pending such application for exemption, the petitioners should have gone on depositing the recurring cost recovery charges. However, in the present case, nonpayment of the charges cannot be the base for rejecting the grant of exemption from the date of the application. This is so because admittedly all the while when such application was pending, the petitioners were never conveyed that such application shall not be processed, ente .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

One way of looking at condition contained in clause (c) of para 5 is that at the time of making of the application, no past charges should be pending. If the 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 t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.