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2020 ] COST RECOVERY CHARGES A123

years. Accordingly, in respect of the eligible ICDs/CFSs specific orders in indi-
vidual cases for grant of exemption from the payment of cost recovery charges
are issued by Ad.IV Section of the Board. As per the existing instructions, the
cost recovery posts at ICD/CFS which have been in operation for two consecu-
tive years with following performance benchmark for past two years will be con-
sidered for regularization of cost recovery posts. The waiver of cost recovery
charges would be prospective with no claim for past period. Criteria would be
applicable on actual performance of ICDs/CFSs.

(i) No. of containers handled by ICD 7200 TEUs per annum
(ii) No. of containers handled by CFS 1200 TEUs per annum
(iii) No. of B/E processed by ICD/CFS 7200 per annum for ICDs and 1200 for
CFSs
(iv) Benchmark at (i) to (iii) shall be reduced by 50% for these ICDs/CFSs
exclusively dealing with exports as per staffing norms.
Regulations :
Regulation 6(1)(o) of Handling of Cargo in Customs Area Regulations,
2009 (HCCAR) provides that the Customs service provider shall bear the cost of
the Customs officers posted by the Principal Commissioner of Customs or Com-
missioner of Customs, as the case may be on cost recovery basis 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.

Demand of cost of recovery charges :
In Commissioner of Central Excise and Customs, Kerala v. Larsen and Toubro
Limited - 2015 (39) S.T.R. 913 (S.C.) the Supreme Court found that the appellant
started working as CFS with effect from 1-3-2008 and as per instructions dated
14-12-1995 read with Circular No. 52/97-Cus., dated 17-10-1997 [1997 (95) E.L.T.
(T63)], a CFS is required to deposit in advance the cost of recovery charges. It is
fact on record that cost recovery charge is to be calculated by the revenue, the
appellant cannot pay the cost recovery charges without calculation of demand of
cost recovery charges payable by the appellant. Therefore the Supreme Court
held that in the absence of any calculation of the demand made by the Revenue,
the appellant cannot be responsible for non-payment of cost recovery charges.
The Supreme Court found that as per Circular dated 12-9-2005, if CFS achieved
the benchmark performance within the initial two years it is entitled for waiver
of charges. In the present case the appellant achieved the benchmark perfor-
mance. In such cases the Revenue is duty bound to examine the issue and dis-
posed of the claim of waiver filing which the Revenue cannot continue to de-
mand of cost of recovery charges from the appellant.
In Krishna Cargo Movers Private Limited v. Commissioner of Customs, Amrit-
sar - 2017 (358) E.L.T. 295 (Tri. - Chennai) the appellant is notified CFS on 6-12-
2007 and started its operations with effect from 1-3-2008. The appellant is re-
quired to deposit in advance cost recovery charges for the customs officials post-
ed at port. The appellant paid the above said charges till February 2010. After
that the appellant did not pay the said charges. On 6-9-2010 the Revenue de-
manded a sum of ` 36 lakhs towards the cost recovery charges. The appellant
paid it in two instalments. Further the Revenue demanded ` 1.35 crores on
EXCISE LAW TIMES  15th May 2020  31