SANCO TRANS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE writ petitions are covered by a judgment of this court in M/s.Hari CFS represented by its CFS Manager V.John Vasac and others Vs. Union of India, represented by its Secretary, Department of Revenue, Ministry of Finance, Government of India, New Delhi and others in W.P.(MD)Nos.2634 to 2636 of 2009, dated 04.02.2011. In that batch of writ petitions, similar contentions were raised. For the sake of repetition, they may be referred to.

(2.) THE contentions of the petitioners in all the writ petitions were identical. The petitioners had stated that appropriate permissions were obtained from the second respondent for establishing CFS/ICD. By a public notice, the petitioners were appointed as Custodians of goods meant for Import/Export and after specifying the areas of CFS and that area was also declared as Customs area for the purpose of the Customs Act. The petitioners' companies were required to comply with the Customs Act provisions with regard to establishment of CFS/ICD and to execute a bond together with bank guarantees in favour of the third respondent. Accordingly, bonds were executed together with appropriate bank guarantees. The bond and bank guarantee were primarily to ensure compliance with the provisions of the Customs Act and for indemnifying the customs authorities for any loss of duty suffered due to any negligence on the part of the petitioner' companies. The establishment of CFS was to facilitate import and export of cargo. The Cargo which are to be exported will be brought to CFS and will be examined by the Customs Officials and thereafter, stuffed into the containers. After completion of customs formalities, they will be allowed for export. Thereafter, the containers will be taken to the gateway port and loaded into ships. Similar reverse exercise will be done in the case of imported cargos. The containers will be brought from the ship to CFS and after unloading it in the specified port, it will be unpacked or de -stuffed. The cargos will be examined by the deputed Customs officials. After verification, they will be released to the importers.

(3.) THE contention of the petitioners were that the Officers of the Customs department are performing their statutory duties under the Customs Act. Their function is a sovereign function. No fee can be levied for the discharge of statutory or sovereign function. The Government is empowered to levy Customs Duty under Section 12 of the Customs Act. Therefore, further cost recovery is void ab initio and violative of Articles 14 and 265 of the Constitution of India. The cost recovery made by the respondents is nothing but a fee. Charging at the rate of 185% of total salary of the Customs Officers is extravagant and exorbitant. Even in other ports, writ petitions have been filed questioning the recovery of charges for payment to the Customs Officers. Any revision of pay scale by the Central Government will apply to payment of salary by the Union Government to its employees. If any retrospective effect were to give on such revision of scales of pay, that cannot be passed on to the handlers of Export and Import. It is also stated that the Kerala High Court in similar circumstances had upheld the case of the petitioners.