Loxim Industries Pvt Ltd  VERSUS C.C.E.-Ahmedabad-ii

Excise Appeal No.759 of 2012

(Arising out of OIA-173/2012/AHD-II/CE/AK/COMMR-A-/AHD dated 12/07/2012 passed by

Commissioner of Central Excise-AHMEDABAD-II)

 

Loxim Industries Pvt Ltd 

VERSUS

C.C.E.-Ahmedabad-ii

 

APPEARANCE:

Shri P G Mehta, Advocate for the Appellant

Shri Kalpesh Shah, Superintendent (AR) for the Respondent

CORAM: HON’BLE MEMBER (TECHNICAL), MR. RAJU

Final Order No. A/ 10065 /2023

DATE OF HEARING/DECISION: 12.01.2023

RAJU

This appeal has been filed contesting demand of MOT charges.

2. Learned counsel pointed out that in para 5.2 of the impugned order, it

is clearly stated that the demand relates to the service provided by the

officers during normal working hours. He pointed out that the issue is

squarely covered by the larger bench decision in the case of RELIANCE

INDUSTRIES LTD.- 2013 (294) ELT 403 (Tri.-LB).

3. Learned AR relies on the impugned order.
4. I have considered the rival submissions. I find that the issue is

squarely covered by the decision of larger bench in the case of RELIANCE

INDUSTRIES LTD. (supra) wherein, the following has been observed:-

2. By the order dated 27-6-2008 [2009 (236) E.L.T. 328 (Tri. – Ahmd.)]

a learned Division Bench of this Tribunal has referred for consideration of

a Larger Bench, resolution of the conflict in the opinions recorded by

different Division Benches of this Tribunal. In M/s. Sigma Corporation

India Pvt. Ltd. v. CCE, New Delhi – 2004 (165) E.L.T. 168 (Tri.-Del.);

in CCE Jaipur-1 v. Flair Filtration (P) Ltd. – 2007 (209) E.L.T. 475 (Tri.-

Del.); and in M/s. Rajasthan Textile Mills v. CCE, Jaipur-1 – 2007 (216)

E.L.T. 380 (Tri.-Del.), this Tribunal took the view that there is no

requirement for payment of Merchant Overtime Charges (MOT) towards

services rendered by Central Excise Officers during working hours, in

respect of services pertaining to supervision of boarding of goods

exported through containers, i.e. levy of fees the under Customs (Fees for

Rendering Services by Customs Officers) Regulations, 1998, these

Regulations having been issued in exercise of powers under Sections 157

and 158 of the Customs Act, 1962 read with para 1.2, part II, Chapter 18

of the C.B.E. & C. Excise Manual of supplementary instructions. A contrary

view and in favour of Revenue, to the effect that MOT requires to be

remitted even where Central Excise Officers render the aforementioned

services during working hours, was expressed in M/s. Naval Overseas Pvt.

Ltd. v. CCE, Ahmedabad – 2007 (218) E.L.T. 673 (Tri.-Ahmd.) and in CCE

Rajkot v. Reliance Industries Ltd. – 2009 (236) E.L.T. 313 (Tri.-Ahmd.) in

view of the extant conflict on interpretation of the same raft of operative

legal regimes, the reference to this Larger Bench was occasioned and the

issue falling for our consideration is whether one view or the other is

legitimate, having regard to the relevant portions operative in the area. It

now transpires that the decision of this Tribunal in M/s. Sigma Corporation

India Pvt. Ltd. has been affirmed qua the judgment of the High Court of

Delhi in CCE v. M/s. Sigma Corporation India Pvt. Ltd. – 2013-TIOL-323-

HC-DEL-CUS = 2013 (293) E.L.T. 649 (Del.). The Delhi High Court framed

the questions of law that falls for consideration in the appeal before it

(preferred by Revenue under Section 35G(2) of the Central Excise Act,

1944) as follows :

“Whether the Central Excise Officer discharging his duties as the Customs

Officer, in the factory premises of the assessee. Tribunal would be

discharging such functions in “customs area” as the sub-section 11 of

Section 2 of the Customs Act, 1962?”

3. The Delhi High Court referred to the fact that overtime fee is collected

under Customs Act, 1962 read with the 1998 Regulation; referred to

Notification No. 14/2002-C.E. (N.T.), dated 8-3-2002, as amended by

Notification No. 22/2002-C.E. (N.T.), dated 4-6-2002 (issued by the

C.B.E. & C.) and concluded that where an Excise Officer (who is a deemed

Customs Officer) provides supervisory services/functions at the factory of

an assessee within the jurisdiction of such Excise Officers, the services are

rendered within the range of such officer and since admittedly these

functions were executed during normal working hours.

4. It is strenuously contended on behalf of Revenue that the judgment

of the Delhi High Court need not be followed, since there is no analysis of

provisions of Sections 2(11), 2(13), 7, 8 & 9 of the Customs Act, 1962,

which define “customs area”/”customs station” and delineate the powers

and authority of officers to declare such other premises which could be

considered to prise “customs area”/“customs station”. It is further

contended on behalf of Revenue that the judgment of the Delhi High

Court understood as having excluded levy of MOT fee contrary to the

express, clear Regulation 2(c), (i), (ii) and clauses A, B, C, D thereof read

with the definition working of hours enumerated in clause (d). The

contention in argument of the learned Departmental Representative and

predicated on clause (i) and (ii) of clause (c) of Regulation 2 of the 1998

Regulations is that the liability to remit MOT referred to as customs fees

in these regulations clearly arises in respect of performance of customs

work by Customs Officers beyond customs area at any time : in

contradiction sub-clause 1(i) which enjoins the liability to remit these fees

where the performance of customs work by Customs Officer is beyond

working hours but within the customs area.

5. According to Revenue therefore the judgment of the Delhi High Court

is flawed since it does not adequately analyse and reflect the

unambiguous provisons of the 1998 Regulations.

6. Having given our anxious consideration to the contentions urged on

behalf of Revenue, we are compelled to reject the same. The several

contentions urged on behalf of Revenue do not merit acceptance by this

Tribunal. The Delhi High Court has referred to the 1998 Regulations. The

conclusions recorded by the Delhi High Court cannot therefore be

considered per incuriam. When a pronouncement on an issue directly

falling our consideration is covered by a judgment of High Court, and

there is no contrary principle emanating from the decision of any other

High Court, principles of law and of hierarchical discipline enjoins that the

principle delineated by the judgment of High Court should be followed. To

hold otherwise would introduce an element of uncertainty and normative

incoherence.

7. On the aforesaid analysis, in view of the decision of the High Court of

Delhi in CCE v. M/s. Sigma Corporation India Pvt. Ltd. – 2013-TIOL-323-

HC-DEL-CUS = 2013 (293) E.L.T. 649 (Del.), the issue referred for

consideration by this Larger Bench does not survive. The reference is

accordingly rejected .

5. Relying on the aforesaid decision, I find no merit in the impugned

order, the impugned order is set aside. Appeal is allowed.

(Dictated & Pronounced in the open court)

(RAJU)

MEMBER (TECHNICAL)