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2017 (12) TMI 676

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 .....

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e 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 exempti .....

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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 .....

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titioner no.1 company. The petitioners are engaged in the activity of providing Customs Cargo Service at Mundra 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. I .....

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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 .....

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wo 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 .....

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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 .....

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nd in order. On 30.04.2013, the Commissioner of Customs, Kandla, wrote to the Director General of Human Resources Development, forwarding the documents of the cargo handled by the petitioners and further stating that the petitioners are eligible for consideration for grant of exemption from payment of cost recovery charges in terms of circular dated 10.04.2013. 7. Despite these internal communications, the exemption as applied for by the petitioners did not comeforth immediately. In the meantime .....

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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 .....

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called for from the petitioners by the department. Whatever delay that took place in processing and granting the application for exemption, can be attributed only to the respondents. Once the competent authority was of the opinion that the petitioners satisfied necessary requirements for grant of exemption, such exemption must relate back to the date of application. Counsel further submitted that the petitioners fulfilled all the requirements. At no stage, there was any communication from the r .....

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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 .....

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r was dismissed. 13. In background of such facts and contentions, we may peruse the materials on record more minutely. As noted, 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 .....

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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 .....

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y question is, did the authorities make a mistake in making such exemption prospective i.e. effective from the date of the order and leaving the earlier period from the date of the application till the date of the order uncovered. 17. In this context, the conditions laid down in clauses (b) and (c) of para 5 would have to be examined. Clause (b) of para 5 does provide that such exemption from cost recovery charges would be prospective and clause (c) provides that no cost recovery charges should .....

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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 .....

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nt 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 conta .....

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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 .....

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hat 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 tha .....

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