The appellant, Goodearth Maritime Limited was appointed as Custodian of the goods meant for loading of salt for export or import and coastal movement under Section 45(1) of the Customs Act, 1962 vide Notification dated April 23, 2002, subject to fulfillment of various conditions.
The Assistant Commissioner of Customs through a letter allowed the appellant to operate and continue its jetty on payment of Merchant Over Time (MOT) charges as per Customs, which is a fee for Rendering Services of Customs officers Regulations, 1998 whenever they require services of Customs officers of their jetty till separate posting of Customs staff has been made on Cost Recovery Basis. On the basis of the letter, the appellant was paying MOT charges for the services rendered by the Customs officers at their jetty.
A show-cause notice was issued to the appellant which stated that under Regulations 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR) the Customs Cargo Service Provider (CCSP) has undertaken to bear the cost of the Customs officers posted, at their jetty, on a 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.
The respondent contended that the CCSP has not paid the cost recovery charges for the Customs staff posted at their private jetty, and hence, the CCSP being Custodian has contravened the provisions and conditions of the 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 is found liable to suspension/revocation.
The Custom, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of a Judicial member Ramesh Nair and a Technical Member Raju while relying on the various decisions held that under any circumstances, in the facts of the present case, the demand of cost recovery charges is not sustainable.
“We find that Hon’ble High Court not only set-aside the demand of Cost Recovery charges but even held that Regulation 5(2) of Regulation 2009 is illegal. Therefore, considering the entire facts and circumstances of the case and settled legal proposition cited above, we hold that the demand for Cost Recovery charges will not sustain. Hence the impugned order is set aside and the appeal is allowed with consequential relief if any arise in accordance with the law,” the tribunal said.Subscribe Taxscan AdFree to view the Judgment