2025-VIL-2066-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs – Regulations 5(2), 6(1)(o) and 12(8) of Handling of Cargo in Customs Areas Regulations 2009 – Demand of cost recovery charges – Sustainability – Commissioner appointed Appellant as Custodian of Imported goods and the goods to be Exported – Appellant submitted an application for waiver of payment of cost recovery charges in terms of Notification dated 12-9-2005 as it claimed to have achieved the requisite target – Department issued show cause notice alleging that Appellant did not fulfill conditions set out in Regulations 5 and 6 of the Regulations – Commissioner confirmed demand of outstanding cost recovery charges under Regulations 5(2) and 6(1)(o) of the Regulations and imposed penalty upon Appellant under Regulation 12(8) of the Regulations – Whether demand of cost recovery charges could have been confirmed by Commissioner exercising powers under Regulations 5(2) and 6(1)(o) of the Regulations – HELD – Show cause notice had invoked provisions of Regulation 12 of the Regulations, which does not provide for realisation of cost recovery charge, but only provide for revocation of licence granted to custodian on account of various breaches as contained therein. Commissioner had not appreciated the legal provision as contained in the Regulations, which do not indicate machinery for realisation of cost recovery charge on account of being defaulted. Order passed by Commissioner is beyond scope of provisions of the Regulations, more so when he had decided not to cancel licence of Appellant and only imposed penalty. Commissioner committed an illegality in ordering recovery of cost recovery charges under aforesaid provisions of the Regulations. Direction to pay cost recovery charges in impugned order cannot be sustained. Impugned order passed by Principal Commissioner is set aside – Appeal allowed
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