MOT charges leviable only if services provided beyond normal working hours or beyond range area.

PJ/Case Law/2013-14/1965

Case:- COMMISSIONER OF CENTRAL EXCISE Vs SIGMA CORPORATION INDIA PVT. LTD.

Citation:- 2013 (293) E.L.T. 649 (Del.)

Brief facts:- Respondent was manufacturer and exporter of auto parts under DEPB Scheme. The respondent had exported certain consignments of auto parts during September, 1997 to September, 2002. It was admitted that stuffing of goods in containers for the export was done in the factory of respondent under the supervision of Central Excise Officer having jurisdiction over the factory under Section 36 of the Customs Act read with Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998. Regarding the stuffing work done by the Customs Officer in the factory of respondent under the supervision of the jurisdictional Central Excise Range Officer, the Deputy Commissioner of Central Excise issued a letter directing the respondent to pay MOT charges of over Rs. 7 lakhs covering the aforesaid period. The said demand was challenged by the respondent before the Commissioner (Appeals) by contending that for services rendered by Customs Officer, no MOT charges were payable. It was contended that under Section 36 of the Customs Act, fee, if any, was payable only when the services for supervision were availed after working hours. It was contended that same was not the position in the present case, as such, no fee in the present case was payable. However, the Commissioner (Appeals) reduced the charges to Rs. 3,37,900/- by observing that calculation of the MOT fee had been made on the basis of AR4/ARE1 register maintained in the Range Office which was irregular and same had to be worked out on the basis of visits and number of hours of services rendered by the Central Excise Officers in terms of relevant regulations. The said order was challenged by the respondent by filing an appeal before the Tribunal wherein it was held that services of supervision of stuffing of goods in containers was rendered by the concerned Officer within his range only i.e., within his normal place of work, as such, condition for levy of MOT charges was not satisfied and accordingly dismissed the appeal.

Appellant’s contentions:- Learned counsel for the appellant had contended that the normal place of work of Central Excise Officer was his office only. It was submitted that vide para 1.2, Part II, Chapter 18 of C.B.E. & C.’s Excise Manual of Supplementary Instructions, it was provided that if a manufacturer or exporter requisitions service of Central Excise Officers for supervision and examination of export cargo and stuffing in containers at his premises, such officers discharge the functions of Customs Officers. It was contended that in the present case the stuffing was done in the factory of respondent by the Central Excise Officer, as such, the Central Excise Officer works as a Customs Officer also. It was submitted that such a facility had been extended to avoid hassles of examination and stuffing of cargo at port. It was contended that in the present case, the Central Excise Officer had discharged his duty in the factory premises of respondent, the Central Excise Officer had functioned as a “Customs Officer”, as such, MOT was leviable.

Respondent’s contentions:- On the other hand, learned counsel for the respondent had submitted that the Central Excise Officer in his capacity as a Customs Officer had rendered the services of stuffing of goods in containers within his range only, i.e., in the factory falling within his range only, as such, same comes within his normal place of work and no fee was payable.

Reasoning of judgment:- The overtimefee was collected under Section 36 of the Customs Act read with Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998 made thereunder. Section 36 of the Customs Act allows loading/unloading of imported/export cargo from any vessel beyond working hours on any working day or on holiday only on payment of prescribed fees. The rate and the manner of collection of such fee was given in the aforesaid Regulations of 1998.
In the presentcase, it was an admitted position that stuffing work was done in the factory of respondent under the supervision of jurisdictional Central Range Officer during working hours only. The place of working/supervision was at the factory of the respondent which was at Mayapuri, Learned counsel for the respondent had pointed out that as per 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, the jurisdiction of Delhi-II, Range 26 of Central Excise Division-V includes Mayapuri Indl. Area Ph.-II where the factory of respondent was located, the services were rendered by the officer within his range only. The same fell within the jurisdiction of the Central Excise Range Officer who supervised the work. Chapter 13 of the C.B.E. & C.’s Customs Manual deals with “Merchant Overtime Fee” wherein it was provided that if services were rendered by the Customs Officer at a place which was not his normal place of work or a place beyond the Customs area, overtime was levied even during the normal working hours. In the presentcase, none of the conditions for levy of MOT was satisfied. Accordingly,they answered the substantial question of law in the affirmative.

Appeal was accordingly dismissed with no order as to costs.

Decision:- Appeal dismissed.

Comment:- The analogy drawn from the case is that the Central Excise Officer discharging his duties as a Customs Officer, in the factory premises of the assessee, could be said to be discharging such functions in a ‘Customs Area’ as defined in sub-section (11) of Section 2 of the Customs Act, 1962 if the services were rendered by the officer within his range only. Accordingly, as the services were provided by the Central Excise Officer within normal working hours and within “Customs Area” as the factory of the assessee was situated within the range area only, no MOT charges were held to be payable by the assessee.

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PJ/Case Law/2013-14/1965

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