Dighi ICD cites SC verdict, takes Pune customs dept to court

Pune, March 17 The Inland Container Depot (ICD) Dighi has filed a writ petition in the Bombay High Court against the Pune Commissioner of Customs challenging the practice of collecting Cost Recovery Charges (CRC) from ICDS on the basis of a Supreme Court judgment of April 2007.
The CRC is a charge paid by custodians of ICDs — in this case Dynamic Logistics Private Limited — to the customs department towards the salary of the customs officers posted at the ICD at the rate of 185 per cent of the total salary of the officers.
The writ was filed in response to the Customs Department directive to Dynamic Logistics, the custodians of ICD Dighi, asking the latter to shell out in excess of Rs 41 lakh in arrears towards the CRC.
S K Sawhney, customs commissioner, Pune said the petition has not yet reached him. He did not comment on the Supreme Court judgment on account of it being sub-judice.
On February 26, the customs department issued a notice to Dynamic Logistics asking it to pay the arrears or face customs de-notification of the dry port at Dighi and cancellation of their license as ICD custodians.
This order prompted Dynamic Logistics to file a writ petition with the Bombay High Court. Company officials said the court had issued a stay on the Customs Department directive on Friday.
Dynamic Logistics is challenging the CRC, which is applied across the country, on the basis of the Supreme Court Judgment of April 2007 against the State of Jammu and Kashmir. The judgement ruled for petitioners M/s Gupta Modern Breweries against the Jammu and Kashmir excise department on the grounds that since the excise department was serving itself by posting its officials here, tax payers should not be asked to pay for their salaries.
Applying the same logic to Customs, ICD Dighi is arguing that the “services rendered by the Officers of Customs are part of performance of their statutory duties and functions under the Customs Act.”
The customs department had said in its directive issued to the company that by agreeing to be the custodians in 1998, Dynamic Logistics legally agreed to bear the expenses of the customs staff posted at the ICD. It has also said that by posting officers at the ICD, the customs department is serving the custodians, not itself, as importers and exporters using ICD Dighi are charged a certain fee which goes towards the payment of CRC.
There are more than 39 ICDs across the country that have been exempted by the Central Board of Excise and Customs from paying CRC as they reach certain volume in cargo traffic. ICD Dighi has been asking for exemption from paying CRC on the same grounds — which has been denied on technical grounds.
Expressindia.com; Ranjani Raghavan
Posted online: Tuesday , March 18, 2008