Cus - Unloading of cargo from vessels carrying exclusively coastal goods - Refund of supervision charges was rejected solely on ground that supervision was provided as appellants had asked for the same - Supervision charges are statutory in nature, hence, it cannot be collected if it is not due: CESTAT
By TIOL News Service
MUMBAI, NOV 14, 2015: THE appellants are manufacturers of HB Sponge Iron. They are engaged in import of iron Ore Pellets/Iron Ore lumps and also procure the same indigenously. While procuring the goods indigenously also, they used ships for transportation.
During unloading of material from ships, the appellants are required to follow the provisions of Section 92, 93, 94, 97 and 98(1) of the Customs Act and which required the unloading of cargo to be done under Customs supervision. This supervision was done at a cost and the same was recovered from the appellants. Notification No. 43/97-Cus(NT) exempts “Vessel carrying exclusively coastal goods” from the provisions of Sections 92, 93, 94, 97 and 98(1). As a result, such vessels were not required to unload cargo under Customs supervision and, therefore, no supervision charges was required to be paid.
The appellants were utilizing services of foreign vessels on coastal run for the purpose of transportation of cargo from one Indian Port to another Indian Port. They had sought supervision from the Customs and supervision was provided by the Customs. The appellant paid the said supervision charges. However, on realizing that such ships are exempted by virtue of Notification No. 43/97-Cus.(NT), they applied for refund of the supervision charges. This claim was rejected by the original adjudicating authority relying on Circular No. 40/97-Cus dated 19.9.97 issued by CBEC wherein it is clarified that the exemption from the provisions of Sections 92, 93, 94, 97 and 98(1) would not be applicable to vessels which converted status from foreign run to coastal run and vice versa .
In appeal, the Commissioner (A), in a succinct order, came to the conclusion that no supervision charges are payable, however, he confirmed the demand of supervision charges only on the ground that the appellant had asked for the supervision. Nonetheless, the ground on which the original adjudicating authority confirmed the demand was not upheld.
Aggrieved, the appellant is before the CESTAT.
The Bench after considering the rival contentions observed -
5. … We find that it is an admitted position that supervision charges are not required to be paid, however, the refund has been rejected solely on the ground that the appellants had asked for the supervision and the same was provided, therefore, refund cannot be granted. We find that the supervision charges are statutory in nature and prescribed by law. Being statutory charges, it cannot be collected if it is not due. It is not like an ordinary services where as a liability arise as the result of availment of service. Furthermore, this ground was not a ground for which the original adjudicating authority had rejected the refund.
The order was set aside and the appeal was allowed with consequential benefits.
(See 2015-TIOL-2419-CESTAT-MUM)