Whether CEO discharging his duty as Customs Officer in assessee’s factory can be said to have discharge his functions in ‘Customs Area’?

PJ/Case Laws/2012-13/1517

Case:-Commissioner of Central Excise Vs M/S Sigma Corporation India Pvt Ltd

Citation:-2013-TIOL-323-HC-DEL-CUS

Brief facts:-Respondent is 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 is 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, is payable only when the services for supervision are 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 (Appeal) 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.

Appellants contention:-The learned counsel for the appellant has contended that the normal place of work of Central Excise Officer is his office only. It is submitted that vide para 1.2, Part II, Chapter 18 of CBEC's Excise Manual of Supplementary Instructions, it is 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 is 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 is submitted that such a facility has been extended to avoid hassles of examination and stuffing of cargo at port. It is contended that in the present case, the Central Excise Officer has discharged his duty in the factory premises of respondent, the Central Excise Officer has functioned as a “Customs Officer”, as such, MOT is leviable.

Respondents contention:- The learned counsel for the respondent has submitted that the Central Excise Officer in his capacity as a Custom Officer has 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 is payable.

Reasoning of judgement:- Tribunal was of the view that it is 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 is at Mayapuri. Learned counsel for the respondent has pointed out that as per Notification No.14/2002-CE(NT) dated 08.03.2002 as amended by Notification No.22/2002-CE(NT) dated 04.06.2002, the jurisdiction of Delhi II, Range 26 of Central Excise division-V includes Mayapuri Industrial Area Ph.-II where the factory of respondent is 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 CBEC's Customs Manual deals with “Merchant Overtime Fee” wherein it is provided that if services are rendered by the Customs Officer at a place which is not his normal place of work or a place beyond the Customs area, overtime is levied even during the normal working hours.

In the present case, none of the conditions for the levy of MOT is satisfied. Accordingly, the appeal is dismissed.

Decision:- Appeal was dismissed.

Comment:-It is concluded from this case that MOT charges are not payable by the assessee if the stuffing work was done under the supervision of CEO in the factory of the assessee in the jurisdictional area and that too during working hours.

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PJ/Case Laws/2012-13/1517

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