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High Court of Andhra Pradesh
NOOTY RAMAMOHANA RAO
GMR. Hyd. International Airport Ltd.,
Versus
Central Board Of Excise & Customs, New Delhi & Others
W.P. No. 27840 of 2010
Decided On : 11-06-2012
Customs Act, 1962 – Section 141(2) r/w 157 – The Handling of Cargo in Customs Areas Regulations, 2009 – Regulations 4, 5 and 5(2) – Custodians are appointed – Public-Private Participation –Demands and to provide top class infrastructural facility – Cost recovery condition – Challenged – Tender process – Religious Endowments – Petitioner submitted that the application on for appointment as Custodian – Before any such application is considered, one is required to comply with the conditions stipulated in Circular were subsequently modified issued by Central Board of Excise and Customs – One of the stipulations contained in these circulars is that the salary and allowances payable to the officers posted from the Customs Department will be borne by the Custodian – Hence a representation has been submitted by the petitioner to the Central Board of Excise and Customs -first respondent herein for waiving Conditions of Circular dated petitioner has specifically asserted that the cost component of the customs official salary bill is not collected from the cargo operators at other airports namely Trivandrum and Cochin Airports – It is also pointed out that, no such charges are also collected from the cargo terminal operators – Through a notification dated petitioner was granted custodianship subject to 24 conditions stipulated therein including the cost recovery condition – It is this condition which is specifically challenged in this writ petition – Held, Constitutional Bench of Supreme Court in the case of Commissioner, Hindu Religious Endowments has held that a fee could be charged by the state for the service rendered by some governmental agency as long as it is not arbitrary – Supreme Court has made the distinction between tax and fee and held object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the taxpayer and the public authority – Another feature of the taxation is that as it is a part of the common burden, the quantum of imposition upon the taxpayer depends generally upon his capacity to pay – Coming now to fees, a “fee” is generally defined to be a charge for a special service rendered to individuals by some governmental agency amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service.” This judgment has been referred to by Supreme Court in the case Clearing the international passengers or goods, imported or meant for export is a sovereign function of the State – For purposes of effective and efficient discharge of these functions, the custodian is required to provide the necessary infrastructural facilities. Sans such facilities customs clearance duties become imminently impaired – Therefore, while a demand for making available standard infrastructural facilities for facilitating efficient discharge of customs clearance functions is legitimate, but however, demand of reimbursement of cost recovery is totally unjust. There is yet another reason while preparing the appropriation estimates of revenue adequate provision is always made towards the “Head of salaries and allowances” payable to the government servants functioning under various ministries departments – Writ petition allowed.
1. With a view to cater to the ever increasing local demands and to provide top class infrastructural facility, a new Green Field International Airport at Hyderabad on “Public-Private Participation” basis has been conceived. The writ petitioner was declared as the preferred bidder, after following the usual tendering process, resulting in execution of a concessionaire agreement on 20.12.2004 between the Government of India, Ministry of Civil Aviation and the writ petitioner company for development, construction, operation and maintenance of the Green Field Airport at Shamshabad near Hyderabad. This arrangement gave birth to Rajivgandhi International Airport at Shamshabad. At all the airports, Customs, Immigration, Security and Quarantine services are performed by various officials belonging to the respective departments of the Government of India. Clearing international passengers at the Passenger Terminal is performed by the Customs Officials. Similarly, the international cargo imported or meant for export through the air cargo complexes created by the airport operator, is cleared by the Customs for purposes of levy of the Duty. For retaining the custody of such cargo, till it is cleared, Custodians are appointed under Section 45 of the Customs Act, 1962. Accordingly, the writ petitioner has submitted the necessary application on 07.12.2006 for appointment as a Custodian. Before any such application is considered, one is required to comply with the conditions stipulated in Circular No.34/2002-Cus. dated 26.06.2002, which were subsequently modified by Circular No. 27/2007-Cus dated 06.04.2004, issued by the Central Board of Excise and Customs . One of the stipulations contained in these circulars is that the salary and allowances payable to the officers posted from the Customs Department will be borne by the Custodian. Hence a representation has been submitted by the petitioner to the Central Board of Excise and Customs -first respondent herein for waiving Conditions 10-13 of Circular 34/2002-Cus dated 26.06.2002. The petitioner has specifically asserted that the cost component of the customs officials salary bill is not collected from the cargo operators at other airports namely Delhi, Mumbai, Chennai, Trivandrum, Ahmedabad and Cochin Airports. It is also pointed out that, no such charges are also collected from the cargo terminal operators at Begumpet Airport, Hyderabad. Through a notification No.2/2008 dated 11.03.2008, the petitioner was granted custodianship subject to the 24 conditions stipulated therein including the cost recovery condition. It is this condition which is specifically challenged in this writ petition.
2. Exercising the power available under Subsection 2 of Section 141 read with Section 157 of the Customs Act, 1962, the Central Board of Excise and Customs framed “The Handling of Cargo in Customs Areas Regulations, 2009” (henceforth called Regulations, 2009). These regulations were notified on 17.03.2009. Regulation 4 required all the customs cargo service providers who were already approved on or before the date of coming into force of these regulations to comply with the conditions contained in these regulations. Regulation 5 detailed the conditions to be fulfilled by an applicant for custody and handling of imported or export meant goods in a customs area. Regulation 5(ii) reads as under:
“5(2) The applicant shall undertake to bear the cost of the Customs officers posted, at such customs area, on cost recovery basis, by the Commissioner and shall make payments at such rates and in the manner prescribed, unless specifically exempted by an order of the Government of India in the Ministry of Finance.”
3. Similarly, Regulation 6 which dealt with the responsibility of custom cargo service provider required in Clause (1)(o) thereof, to bear the cost of customs officers posted by the Commissioner of Customs on cost recovery basis and shall make payments at such rates and in the manner specified by t
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