ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 13.11.2025
CESTAT Allahabad Ruled in Favor of CMA CGM Logistics Park and Orders Refund of Cost Recovery Charges
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
In a landmark decision, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Regional Bench in Allahabad has ruled in favor of CMA CGM Logistics Park Dadri Pvt Ltd, granting them a refund of ₹3,13,16,626 paid as Cost Recovery Charges (CRC) for the period between April 2009 and November 2015. This decision marks a significant milestone in the ongoing debate surrounding the legality of CRC levied by the Customs Department.
Background of the Case
The case stems from CMA CGM Logistics Park Dadri Pvt Ltd’s role as a Custodian of the Container Freight Station (CFS) at Dadri, Uttar Pradesh, since 2005. The company had been paying CRC for customs staff deployed at its facility, as per CBEC Circular No. 52/97-CUS dated 17.10.1997. However, the appellant sought exemption from CRC payments, citing Circular No. 13/2009-CUS dated 23.03.2009, which allowed exemptions for certain custodians.
Despite repeated requests for exemption, the Customs Department granted relief only from November 3, 2015, leaving the period from April 2009 to November 2015 uncovered. This led CMA CGM Logistics Park Dadri Pvt Ltd to file a writ petition, which eventually resulted in the High Court of Allahabad granting them liberty to challenge the Commissioner of Customs’ order through a statutory appeal under Section 129A of the Customs Act, 1962.
Key Arguments and Tribunal Findings
During the hearing, the appellant’s counsel, argued that the exemption from CRC should be granted retrospectively from the date of the application, as supported by the Gujarat High Court’s decision in Adani Ports & Special Economic Zone Ltd vs Union of India. She emphasized that the exemption should not be limited to the date of the order but should cover the period from the application date.
The Tribunal also considered the Andhra Pradesh High Court’s ruling in CBEC vs GMR Hyderabad International Airport Limited, which declared the levy of CRC as ultra vires the Customs Act, 1962. The High Court had ruled that there was no express statutory provision under the Act authorizing the recovery of CRC, making the collection of such charges unlawful.
The Tribunal concluded that the impugned order passed by the Commissioner of Customs was unsustainable. It held that the appellant was entitled to a refund of all CRC payments made during the disputed period, as the levy of CRC was not supported by any statutory provision.
Implications of the Judgment
This judgment has far-reaching implications for custodians of Container Freight Stations, Inland Container Depots, and other facilities where customs staff are deployed. The Tribunal’s decision reinforces the principle that no charges or taxes can be imposed without explicit statutory authorization. It also sets a precedent for other custodians who may have been subjected to similar charges without legal backing.
Conclusion
The ruling in favor of CMA CGM Logistics Park Dadri Pvt Ltd is a significant victory for businesses operating in the logistics and freight sector. It underscores the importance of adhering to legal frameworks and provides clarity on the issue of Cost Recovery Charges. This decision not only ensures justice for the appellant but also paves the way for a more transparent and fair regulatory environment in the customs domain.
Source: CESTAT Allahabad
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