Case Law Details
Goodearth Maritime Limited Vs Commissioner of Customs (CESTAT Ahmedabad)
Conclusion: Since no services were being specially provided by the customs officials to the custodians at a customs port or customs airport, to enable them to collect any fee, from such a custodian thus, High Court not only set-aside the demand of Cost Recovery charges but even held that Regulation 5(2) of Regulation 2009 was illegal.
Held: Appellant M/s. Goodearth Maritime Limited was appointed as Custodian of the goods meant for loading of salt for export/import and costal movement under Section 45(1) of the Customs Act, 1962 vide Notification No. 09/2002/CC dated 23.04.2002, subject to fulfilment of various conditions mentioned therein. A letter was issued by the Assistant Commissioner of Customs to appellant allowing them to operate / continue their jetty on payment of Merchant Over Time (MOT) charges as per Customs (Fee for Rendering Services of /Customs officers) Regulations, 1998 whenever they required services of /Customs officers of their jetty till separate posting of Customs staff had been made on Cost Recovery Basis. On the basis of the aforesaid letter, M/s. Goodearth Maritime Limited, Jakhau, was paying MOT charges for the services rendered by the Customs officers at their jetty. A show-cause notice was issued to the appellant in terms of Regulations 5(2) of the HCCAR, 2009 the Customs Cargo Service Provider (CCSP) had undertaken to bear the cost of the Customs officers posted, at their jetty, on cost recovery basis by the Commissioner of Customs and to make payments at such rates and in the manner prescribed, unless specifically exempted by an order of the Government of India in the Ministry of Finance. Further, as per Regulation 6(1)(o) of the HCCAR, 2009, it was the responsibility of the CCSP to bear the cost of the Customs officers posted by the Commissioner of Customs on cost recovery basis and shall make payments at such rates and in the manner as specified by the Government of India in the Ministry of Finance, unless specifically exempted by an order of the said Ministry. CCSP started to pay establishment charges on Cost Recovery basis from April, 2015 onwards and have paid the Cost Recovery charges upto December, 2017. However, till date they had not paid Cost Recovery Charges for the work handled by the Customs officers/staffs posted, during the period 17.03.2009 to 31.03.2015 amounting to Rs. 1,42,81,265/- as per the provisions of the HCCAR, 2009. However, the CCSP had paid charges on MOT basis during the period 17.03.2009 to 31.03.2015. 7. In view of the above contention, it was alleged that the CCSP had not paid the cost recovery charges for the Customs staff posted at their private jetty, during the period 17.03.2009 to 31.03.2015, and hence, the CCSP being Custodian had contravened the provisions/conditions of the Notification No. 09/2002 dated 23.04.2002 read with Regulation 6(1)(o) of HCCAR, 2009, by not paying the Cost Recovery charges for the Customs Staff posted at the said jetty and thus their Custodianship was found liable to suspension / revocation. Further, the CCSP was also found liable to penalty in terms of Regulation 12 (8) of HCCAR, 2009. It was held that no services were being specially provided by the customs officials to the custodians at a customs port or customs airport, to enable them to collect any fee, from such a custodian. “Cost Recovery” of the salaries and allowances paid to the customs officials was only a dignified form of collection of a fee. Since, no services were specially or generally provided to the custodian, no such fees was liable to be charged. Regulation 5(2) of Regulations, 2009 had no legal substratum to survive and accordingly the consequential levy made on the appellant by the respondents towards cost recovery charges was wholly unsustainable. High Court not only set-aside the demand of Cost Recovery charges but even held that Regulation 5(2) of Regulation 2009 was illegal.
FULL TEXT OF THE CESTAT JUDGEMENT
The Private Jetty of M/s. Goodearth Maritime Limited a Sub-Licensee of M/s. Well Brines Chemicals Limited (now M/s. Jakhau Salt Company Pvt. Limited), the original Licensee, situated at Salt Pield, Jakahu Taluka Abdasa, Kutch, was declared as a Landing Place under Section 8(a) of Customs Act, 1962, by the Commissioner of Customs, Ahmedabad, vide Notification No. 08/2002/CC dated 23.04.2002 and M/s. Goodearth Maritime Limited was appointed as Custodian of the goods meant for loading of salt for export/import and costal movement under Section 45(1) of the Customs Act, 1962 vide Notification No. 09/2002/CC dated 23.04.2002, subject to fulfilment of various conditions mentioned therein.
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