Cus - ICD custodian - Commissioner does not have power to decide on exemption or waiver of Cost Recovery Charges: CESTAT
By TIOL News Service
NEW DELHI, MAR 09, 2017: THE appellants were appointed as Custodian of Inland Container Depot (ICD) at Jodhpur under Section 45(1) of Customs Act, 1962 in June 2001. On 6.11.2001, Ministry of Finance conveyed the sanction of 13 temporary posts, of customs officials of various ranks, to manage the customs work in the ICD. One of the conditions for managing the ICD is that the appellants have to pay Cost Recovery Charges @ 185% of the salary of the staff deployed to the Government.
The present appeal is relating to appellant's liability to pay such cost recovery charges for the period 1.4.2009 to 31.12.2012 amounting to Rs.4,12,94,397/-.
A show cause notice dated 28.2.2013 was issued to the appellant to recover the said amount in terms of Handling Cargo in Customs Area Regulations, 2009. The Commissioner appointed an inquiry officer, who submitted his report on 1.5.2014.
The Original Authority decided the case vide the impugned order and held that the appellants have to pay the full amount of Rs.4.12crores. It was also held that the waiver/exemption from payment of Cost Recovery Charges is not automatically available to the custodian in case of default but was required to be sought afresh following the prescribed procedure. Furthermore, as the appellants have not paid the Cost Recovery Charges, their application for exemption cannot be considered.
The appellant is before the CESTAT and makes detailed submissions while concluding that the Commissioner acted without authority of his own and confirmed the liability towards Cost Recovery Charges without due consideration of all the guidelines issued by the Ministry and without reference to CBEC.
The AR submitted that in terms of the Public Notice issued appointing the appellant as Custodian as well as the new Regulations, they are liable to pay Cost Recovery Charges for Customs Officers and staff deployed in the ICD; that exemption from such charges are to be specifically considered and approved by the Ministry as per the guidelines laid down and there is no automatic or suomoto exemption from such charges.
The Bench observed -
+ The appellants were appointed as Custodians of ICD at Jodhpur. One of the conditions specified in the appointment is that they should pay Cost Recovery Charges for the officers deployed there. However, the Ministry vide their letter dated 23.05.2006 exempted the appellant from payment of Cost Recovery Charges. The Annexure to the said letter clearly states that the Cost Recovery Charges for 13 posts sanctioned for ICD at Jodhpur have been exempted. Thereafter, on 24.2.2010, the Ministry issued further clarification to state that the matter was reviewed in consultation with IFU. The sanction for exemption from Cost Recovery Charges shall be issued for each ICD, on yearly basis. The jurisdictional Commissioners were to report the performance of individual ICDs.
+ The action of the Commissioner in proceeding and confirming the Cost Recovery Charges without due consideration of various guidelines issued by the Ministry and more specifically regarding the entitlement of the appellant for exemption, which has already been granted by the Ministry vide their letter dated 23.05.2006, is not legally sustainable.
+ In any case, the matter has to be considered by the competent authority, namely the CBEC, Ministry of Finance, and not by the Commissioner. We note that none of the guidelines brought to our notice with reference to appointment of ICDs gives power to the Commissioner to decide on exemption or waiver of Cost Recovery Charges. The appellants were given exemption from Cost Recovery Charges by the Ministry. Later, the Ministry laid down certain guidelines to state that such exemption will be given year to year based on the report given by the jurisdictional Commissioner.
+ Keeping these facts in mind, we hold that the present impugned order is not legally sustainable. The Commissioner has to place all the records before the competent authority for a decision and thereafter only the liability of the appellant for Cost Recovery Charges, if any, can be finalized.
The appeal was allowed by way of remand.
(See 2017-TIOL-754-CESTAT-DEL)
