TMI Blog2019 (2) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... r premises. Similarly, Regulation (12) of the CCAR does not prescribe for the recovery of defaulted cost recovery charge. But only states that the same is procedure for suspension or revocation of approval and imposition of penalty. The ld. Adjudicating authority has not appreciated the legal provision as contained in HCR, which do not indicate the machinery for realisation of cost recovery charge on account of being defaulted. In fact, the show cause notice has invoked the provisions of Regulation 12 of HCCAR which does not provide for the realisation of the cost recovery charge but only revocation of the licence granted to CCSP on account of various breaches as contained therein. This regulation has no provisions for recovery of unpaid cost recovery charge on account of non-fulfilment of criteria as laid down in the CBEC circular - the order passed by the ld. Adjudicating authority is beyond the scope of the provisions of HCCAR, 2009. The provisions of Regulation 5(2) of HCCAR is clear and unambiguous that the cost recovery charge is not required to be paid when the same is specifically exempted by the order of Government of India and Ministry of Finance. It is on record th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the existing custodians appointed under Section 45 of Customs Act, 1962, were continued to operate in terms of Regulation 4 of the HCCAR, 2009. The appellant agreed to abide by the terms and conditions as contained in the HCCAR, 2009 and for continuing their operation. During year, 2009-2010, it was found that the appellant did not achieve the prescribed benchmark performance as per Ministry s letter dated 12.9.2005 in terms of processing of documents as they have processed only 4884 documents as against the prescribed 7200 number documents (Bill of Entry/SB). Accordingly, cost recovery charges were demand from them for the deployment of staff posted at ICD/CFS. As the appellant (CONCOR Jaipur) had paid the said amount and the demand was confirmed against them. The appellant paid the said amount as demanded in terms of the adjudication order passed for the said period. The matter was also agitated before the Hon ble CESTAT, however, the same did not find favour and the order passed by the adjudicating authority was upheld on the ground that the Ministry has to decide the issue about levy of the cost recovery charge in terms of the instruction issued from time to time. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara-3 of the letter that the performance of the various ICDs/CFSs regarding cost recovery charge as on 31.8.2005 be ensured, where regularisation of post is suggest as per the enclosure issued under F. No. 11018/12/2005, and proposed to be exempted/waived from the cost recovery. Thereafter the Ministry vide its letter dated 23.3.2006 has decided to exempt ICD/CFS who fulfilled the criteria on the basis of work load from the cost recovery post sanctioned for carrying out the customs function. The appellant s name figured at Sr. No. 16 of the said list. It was impressed upon by the ld. Advocate that thereafter vide letter dated 18th Feb. 2009, CBEC, has regularised the post which was created on the cost recovery basis for sanctioned ICD CFS. In this letter at paragraph 2, it was stated that accordingly I am directed to convey sanction of the President for regularisation and encadrement of following 402 CRB posts (other than Group A posts) in cadre strength of the Central Board of Excise Customs under the department of Revenue . It is the submissions of ld. Advocate that the post created at ICD run by the appellant got regularised at the strength of this letter issued by the Mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide for realisation of cost recovery charges and confirmation of demand for the non-payment of cost recovery charges. The ld. Advocate also drawn our attention towards the provision of Regulation 6 of HCCAR, 2009 which enumerates responsibility of Customs Cargo Service provider. Regulation 6(1)(o) thereof only mandates that the Customs Cargo Service Provider would undertake to bear the cost of the Customs officer posted by the Commissioner of Customs on cost recovery basis and shall make payment at such rates and in the manner specified by Government of India in the Ministry of Finance unless specifically exempted by an order of the Ministry. The ld. Advocate, therefore submits that both the show cause notice and adjudication order suffers from inherent deficiency as there is no provision in the HCCAR to recover the amount which has not paid by the custodian/CCSP. He, therefore, argues that the view has been indirectly accepted by the ld. Adjudicating authority as he has confirmed demand of cost recovery charges without mentioning any regulations in the HCCAR, 2009 in spite of the fact that Show Cause Notice invoked the Regulation 11(1) thereof. The adjudicating authority has orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dled a minimum volume/value of imports and exports and also the minimum number of shipping bills in last two preceding years, the port operators would be exempt from payment of cost recovery charges for the set up specified in the said circular. The exemption would only be 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 port for the purpose of clause (2) of immediately preceding year 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 non-grant 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners must go on depositing the charges as scheduled, the department should have conveyed the same to the petitioners. 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 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 ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncadred in the total staff strength of CBEC as permanent post. Thereafter, the cost of such post is borne by the department . In view of above from the date of encadrisation of post there is no question of charging of any cost recovery charge. Finally, ld. Advocate concludes his argument and submits that there is no requirement of payment of cost recovery charges by the appellant and thus the impugned order is liable to be set aside with consequential benefit to the appellant. 11. On the other hand, the ld. AR on behalf of the Revenue relied upon the order of this Tribunal in the case of appellant itself vide which the order of adjudicating authority was upheld, the order being Final Order No. 51848/2018 dated 16.5.2018 (In Appeal No. 50718/2018), wherein the order passed by the ld. Adjudicating authority was upheld on the ground that the respondent should approach Ministry to re-consider the issue regarding waiver of cost recovery charges imposed upon them. In pursuance of the same, the appellant approached to the Ministry which rejected the request of assessee regarding waiver of the cost recovery charged unless and until amount of subsequent period is deposited and further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis 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; 12. Procedure for suspension or revocation of approval and imposition of penalty:- (1) The Commissioner of Customs shall issue a notice in writing to the Customs Cargo Service provider stating the grounds on which it is proposed to suspend or revoke the approval and requiring the said Customs Cargo Service provider to submit within such time as may be specified in the notice not being less than thirty days, to the Assistant Commissioner or Deputy Commissioner of Customs nominated by him, a written statement of defence and also to specify in the said statement whether the Customs Cargo Service provider desires to be heard in person by the said Assistant Commissioner or Deputy Commissioner of Customs. A perusal of the regulation reveals that the same is intended for levying of cost recovery charge and payment thereof. Similarly, the condition at 5(2) only states that custodian or CCSP will have to undertake to bear expenses of the custom officers posted in the custom area on cost recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided to cost recovery charge in respect of appellant at Sr. No. 16. Further, vide letter dated 18.2.2009, the Ministry has also encadred the post within the cadre strength of CBEC and clarified that after encadrisation of the post there will be no cost recovery charge on account of this vide clarification appearing on the CBEC site as cited by ld. Counsel on behalf of the appellant. 15. Ld. DR has categorically stated that the similar issue was decided by this very Tribunal vide Final Order No. 51848/2018 dated 16.5.2018, wherein the appeal filed by the appellant for the period was dismissed with a condition to approach this Tribunal after taking up the matter with CBEC for the waiver of cost recovery charge in the subsequent period. It is also on record that for the defaulting year i.e. 2009-2010, the appellant has paid the full amount to the cost recovery charge as demanded by the Commissioner vide earlier order. From the perusal of the order of this Tribunal, we find that the same has been disposed without examining the legal provisions as contained in the HCAR, 2009 and the various communications as cited by the ld. Advocate regarding the exemption from the cost recovery c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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