Andhra Pradesh High Court - Amravati
M/S. Visakha Container Terminal ... vs Union Of India, on 30 June, 2021
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HIGH COURT OF ANDHRA PRADESH : AMARAVATI
MAIN CASE: W.P.No.11229 of 2021
PROCEEDINGS SHEET
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3. 30.06.2021 (Through Video-Conferencing)
Heard Mr. G. Shivadass, learned Senior Counsel
assisted by Mr. P. Bhaskar, learned counsel for the
petitioner.
Also heard Ms. Alekhya, learned counsel
representing Mr. N. Harinath, learned Assistant Solicitor
General of India, appearing for respondents No.1 and 2,
and Mr. Suresh Kumar Routhu, learned Senior Standing
Counsel for Customs appearing for respondents No.3
and 4.
By this writ petition, the petitioner challenges
Regulation 5(2) & 6(1)(o) of the Handling of Cargo in
Customs Areas Regulations, 2009 (for short, 'the
Regulations'), as ultra vires the Customs Act, 1962 (for
short, 'the Act'). Challenge is also made to an order
dated 01.03.2021 passed by respondent No.3- Principal
Commissioner of Customs, Customs House,
Visakhapatnam, the operative portion of which reads as
under:
"ORDER
(i) The appointment of M/s. VCTPL as
custodian of the said premises u/s Section
45(1) of the Customs Act, 1962, made vide
Order in F.No.S10/5/2003-Prev dated
18.06.2003 and renewed from time to time,
stands suspended w.e.f 01.07.2021 under
Regulation 11(1) of HCCAR, 2009 for violation
of conditions of the bond executed under
Regulation 5(2) and for non-compliance of
condition 6(1)(o) r/w Regulation 13 of HCCAR,
2009 and the staff posted at VCTPL stands
withdrawn.
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(ii) In case M/s. VCTPL complied with the
above mentioned Regulations by paying the
outstanding cost recovery charges along with
applicable interest and penalty, the order at (i)
above shall be deemed to be withdrawn with
effect from the date of such payment.
(iii) I impose a penalty of Rs. 50,000/-
(Rupees fifty thousand only) on M/s VCTPL
under Regulation 12 (8) of Handling of Cargo
in Customs Area Regulations 2009.
This order is issued without prejudice to
any other action that may be taken/proposed
to be taken in future against M/s. VCTPL or
any other person concerned under Customs
Act, 1962 and/or any other law for the time
being in force in the Republic of India,
including recovery of outstanding arrears of
cost recovery charges payable as per demand
notices issued from time to time."
The said order was passed on the basis of a
show-cause notice dated 05.02.2020 issued under
Regulation 12(1) of the Regulations.
The petitioner pleads that it was given a
custodian order under Section 45(1) of the Act by an
order dated 18.06.2003 of the Commissioner of
Customs, Visakhapatnam.
Drawing attention of the Court to a letter dated
04.10.2004 of the Commissioner of Customs,
Visakhapatnam, it is contended by Mr. G. Shivadass,
learned Senior Counsel, that the said letter states that
the petitioner was not being asked for cost recovery
charges and that by the said letter, the Commissioner
had also sought the views of the Central Board of Excise
and Customs, as was known then, on the subject. Much
later, the Commissioner of Customs had taken a
different view and accordingly, by a letter dated
18.07.2014 of the Commissioner of Central Excise &
Customs, Visakhapatnam Zone, the Director General,
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Human Resource Development, Customs & Central
Excise, was informed that the petitioner appears to be
liable to pay cost recovery charges.
It is contended by Mr. G. Shivadass that in the
aforesaid letter dated 18.07.2014, the Board was also
requested to consider the contention of the petitioner
that no other private container terminal, who is similarly
situated and is operating under the aegis of the Major
Ports, was being made to bear cost recovery charges.
Drawing attention of the Court to the letter dated
28.02.2019 of the Central Board of Indirect Taxes and
Customs, Mr. G. Shivadass submits that by the aforesaid
letter, the Board had agreed with the view as expressed
in the letter dated 18.07.2014. However, the contention
advanced by the petitioner that no other private
container terminal operating under the aegis of the
Major Ports was being made to bear the cost recovery
charges, which was requested to be looked into by the
Board, was not even adverted to.
In the meantime, there was a development in the
sense that the Regulations had come into play.
By virtue of Section 5(2) of the Regulations, cost
of the custom officers posted at a custom area, on cost
recovery basis, by the Commissioner, was made
applicable and such payment was required to be made
at such rates and in the manner prescribed unless
specifically exempted by an order of the Government of
India in the Ministry of Finance. 6(1)(o) of the
Regulations is also on similar lines, Mr. G. Shivadass
contends.
It is further submitted by Mr. G. Shivadass that a
single Bench of the composite High Court at Hyderabad
had struck down Section 5(2) of the Regulations as ultra
vires and an appeal is pending consideration. He has
also submitted that the Delhi High Court, in a recent
judgment, however, has taken a contrary view with
regard to the Regulation in question.
Mr. Suresh Kumar Routhu, learned Senior
Standing Counsel for Customs, submits that against the
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impugned order, an appeal lies under Section 129 of the
Act to the Southern Bench of the Customs, Excise And
Service Tax Appellate Tribunal at Hyderabad and,
therefore, this writ petition may not be entertained. He
has also submitted that in a writ appeal, being
W.A.No.1321 of 2012, the order of the learned single
Judge, whereby Section 5(2) of the Regulations was
struck down as ultra vires, was suspended.
On a copy of the order being produced,
Mr. G. Shivadass agrees with the submission of
Mr. Suresh Kumar Routhu regarding suspension of the
order of the learned single Judge.
The impugned order goes to show that a sum of
Rs.15,88,36,561/- is due and payable by the petitioner
towards cost recovery charges for the period January,
2004 to March, 2021, along with applicable interest.
Essentially, the issue arising in this petition is as
to whether the cost recovery charges are liable to be
paid by the petitioner. Since the validity of Regulations
is in issue, we are inclined to entertain this petition.
Issue notice.
No formal steps are called for as the respondents
are duly represented. However, extra copies be
furnished.
Considering the matter in its entirety, as an
interim measure, we provide that the impugned Order-
in-Original dated 01.03.2021 passed by respondent
No.3-Principal Commissioner shall remain suspended
subject to the petitioner, without prejudice to its rights
and contentions as advanced in this petition, deposits
before the Principal Commissioner 50% of the amount
of Rs.15,88,36,561/- within a period of two months from
today.
Registry will list this case after two months.
In the meantime, pleadings may be exchanged.
ARUP KUMAR GOSWAMI, CJ NINALA JAYASURYA, J
IBL
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