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with interest. A show cause notice was issued on 28-2-2013 to the appellant. The
Commissioner appointed an Inquiry Officer in this regard. The Inquiry Officer
submitted his report on 1-5-2014 in which he recommended that the appellant is
liable to pay ` 96,47,740/- for the period 2009-2010. He also found that the min-
imum benchmark for cargo handling has been achieved in all the years except for
the year 2009-2010. The original authority decided the case vide the impugned
order and held that the appellants have to pay the full amount of ` 4.12 crores on
the grounds that the Ministry in the said guidelines have laid that the sanction of
exemption from cost recovery charges shall be issued for each ICD on yearly
base, keeping in the view the performance during the preceding year. The origi-
nal authority also held that waiver from payment of cost recovery charge is not
automatically available to the custodian in case of default but was required to be
sought afresh following the prescribed procedure. Since the appellants have not
paid the cost recovery charges their application for exemption cannot be consid-
ered.
The Appellate Tribunal observed that the jurisdictional Commissioner
has not followed the required process of examining the exemption already grant-
ed or waiver available to the appellant from cost recovery charges for various
periods year-wise as per the existing guidelines. The deployment of staff and
eligibility of the appellant for exemption from cost recovery charges are to be
considered and decided only by the Ministry. The action of Commissioner in
proceeding and confirming the cost recovery charges without the consideration
of various guidelines issued by the Ministry and more specifically regarding the
entitlement of exemption to the appellant, which has already been granted by the
Ministry, is not legally sustainable. The denial of exemption on the ground that
due application was not filed in time and the matter was not followed up is not
sustainable. The Tribunal held that the matter shall be considered by the compe-
tent authority, namely, C.B.E. & C., Ministry of Finance and not by the Commis-
sioner. The Commissioner has to place all the records before the competent au-
thority for a decision and thereafter only the liability of the appellant for cost re-
covery charges, if any can be finalized. The Tribunal remanded the matter to the
original authority for a fresh decision.
Exemption reiterated :
Vide F. No. 8/B/85/HRD(EMC)/CRB/2015 Pt., dated 10-8-2018, Direc-
tor General, HRD of Indirect Taxes and Customs reiterated that Cost Recovery
posts of Customs facilities that have been in operation for two consecutive years
and have fulfilled the eligibility norms (as mentioned in C.B.I. & C.’s Instruction
F. No. 434/17/2004-Cus-IV, dated 12-9-2005 for ICD/CFS and in para 3 and para
5 of C.B.I. & C.’s Circular No. 16/2013-Cus., dated 10-4-2013 [2013 (290) E.L.T.
(T14)] for Sea Port, Air Cargo Complex, Courier Terminal, Diamond Plaza and
Airports) in the past two years can be considered for exemption.
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