JUDGMENT Mohammad Rafiq, J. - Since the issues involved in all the aforesaid three appeals are same and they arise out of common judgment, therefore, they were heard together and are being decided by this common judgment. 2. These appeals have been filed by the appellant Rajasthan Small Industries Corporation Limited under section 130(1) of the Customs Act, 1962 (for short 'the Act') challenging the common judgment dated 30.12.2016 passed by Customs, Excise & Service Tax Appellate Tribunal, New Delhi (for short 'the Tribunal') whereby the appeals filed by the appellant have been dismissed and adjudication orders passed by the Commissioner of Customs dated 06.11.2012, 01.03.2013 and 19.08.2013 have been confirmed. 3. The aforesaid appeals were admitted by this Court vide order dated 15.11.2017 on the following substantial questions of law: In DB Custom Appeal No. 3/2017 :- "(i) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming that the demand of Rs. 1,71,47,255/-along with interest as cost recovery charges raised by ld. Commissioner of Income Tax under the provisions of regulation 5(2) read with regulation 6(1)(o) of the HCCAR, 2009 was not without jurisdiction? (ii) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming the demand of cost recovery charges raised by the ld. Commissioner of Income Tax pursuant to the 6th Pay Commission. (iii) Whether on the facts and the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming the penalty of Rs. 50,000/- imposed by the ld. Commissioner of Customs on account of alleged non-compliance with the provisions of the Act and the rules, regulation made thereunder. (iv) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming the order passed by the ld. Commissioner of Customs pertaining to the suspension of the approval granted to the Appellant as custodian in respect of ICD-Bhiwadi?" In DB Custom Appeal No. 4/2017:- "(i) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming that the demand of Rs. 2,21,08,003/-along with interest as cost recovery charges raised by ld. 2,21,08,003/-along with interest as cost recovery charges raised by ld. Commissioner of Income Tax under the provisions of regulation 5(2) read with regulation 6(1)(o) of the HCCAR, 2009 was not without jurisdiction? (ii) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming the demand of cost recovery charges raised by the ld. Commissioner of Income Tax pursuant to the 6th Pay Commission. (iii) Whether on the facts and the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming the penalty of Rs. 50,000/- imposed by the ld. Commissioner of Customs on account of alleged non-compliance with the provisions of the Act and the rules, regulation made thereunder. (iv) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in not declaring the order dated 01.03.2013 passed by the ld. Commissioner of Customs to be non-est in the eyes of law being in violation of the principles of natural justice, Nemo debet esse judex in propria sua causa (i.e. no man can be judge in his own case)?" In DB Custom Appeal No. 5/2017:- "(i) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming that the demand of Rs. 1,01,03,833/-along with interest amounting to Rs. 2,39,741/- as cost recovery charges raised by ld. Commissioner of Income Tax under the provisions of regulation 5(2) read with regulation 6(1)(o) of the HCCAR, 2009 was not without jurisdiction? (ii) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming the demand of cost recovery charges raised by the ld. Commissioner of Income Tax pursuant to the 6th Pay Commission. (iii) Whether on the facts and the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming the penalty of Rs. 20,000/- imposed by the ld. Commissioner of Customs on account of alleged non-compliance with the provisions of the Act and the rules, regulation made thereunder. (iv) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming the order passed by the ld. 20,000/- imposed by the ld. Commissioner of Customs on account of alleged non-compliance with the provisions of the Act and the rules, regulation made thereunder. (iv) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in confirming the order passed by the ld. Commissioner of Customs pertaining to the suspension or revocation of the approval granted to the Appellant as custodian in respect of ICDBhilwara? (v) Whether on the facts and in the circumstances of the case and in law the Hon'ble CESTAT was justified in not declaring the order dated 6.11.2012 passed by the ld. Commissioner of Customs to be non-est in the eyes of law being in violation of the principles of natural justice, Nemo debat esse judex in propria sua causa (i.e. no man can be judge in his own case)?" 4. For convenience, the Customs Appeal No. 3/2017 is being taken as leading case. The appellant is a Government of Rajasthan Undertaking. As a private business entity, it has been managing Inland Container Depot (for short 'ICD') in Jaipur since 1989, in Jodhpur since 1995, in Bhiwadi since 1999 and in Bhilwara since 2000. The appellant was appointed as the custodian of ICD at Bhiwadi through a Public Notice No. 2/99(Customs) dated 27.01.1999 by the Commissioner of Customs, Jaipur, in exercise of its power under Section 45(1) of the Act and in accordance with the guidelines for appointment of the custodians of ICDs contained in Circular No. 128/95-Cus dated 14.12.1995. The Central Board of Excise and Customs (for short 'the Board') vide its Circular No. 128/95-Cus dated 14.12.1995 has also provided that undertaking shall be required to be given by a person for being appointed as the custodians of ICDs to abide by conditions thereof. Prior to appointment as the custodian, the appellant communicated its acceptance to the aforesaid undertakings vide letter dated 04.03.1998. The Department of Revenue under the Ministry of Finance, Government of India, vide its letter F.NO. A-11018/48/98 Ad.IV dated 30.12.1998 authorized the cadre controlling authority to fill up 13 temporary posts looking at the workload at various ICDs including ICD at Bhiwadi. The Department of Revenue under the Ministry of Finance, Government of India, vide its letter F.NO. A-11018/48/98 Ad.IV dated 30.12.1998 authorized the cadre controlling authority to fill up 13 temporary posts looking at the workload at various ICDs including ICD at Bhiwadi. The aforesaid letter also stated that the cost of the posts may be obtained from the party which is running the ICD and the posts shall be provided to the ICDs only after the entire cost of the posts is deposited by the party. Subsequently, the Handling of Cargo in Customs Areas Regulations, 2009 (for short 'HCCAR, 2009') were promulgated vide Notification No. 26/2009-Cus(NT) dated 17.03.2009. The Board vide Circular No. 13/2009-Cus dated 23.03.2009 conveyed salient features of HCCAR, 2009. Para 10 of the said circular inter alia clarified that HCCAR, 2009 superceded instructions issued by the Board vide Circular No. 128/95-Cus dated 14.12.1995 providing for guidelines for the appointment of custodians of ICDs and undertakings to be given by a person to be appointed as custodian of an ICD. Proviso to Clause 10(1) of HCCAR, 2009 stipulated that a Custom Cargo Service Provider already approved on or before the date of coming into force of HCCAR, 2009, shall be deemed to be approved as a Customs Cargo Service Provider under the said regulations for a period of five years from the date of compliance with the conditions stipulated in Clause 4 thereof. Clause 4 of HCCAR, 2009 stipulated that Customs Cargo Service Providers already approved on or before the date of coming into force HCCAR, 2009, shall comply with the conditions of the regulations within a period of three months or such period not exceeding a period of one year as the Commissioner of Customs may allow from the date of coming into force of HCCAR, 2009. In the event of non-compliance, the Commissioner of Customs, in terms of Clause 11 of HCCAR, 2009, would suspend or revoke the approval granted to the Customs Cargo Service Provider subject to the observance of procedure prescribed under Clause 12 and also order for forfeiture of security, if any. 5. According to the appellant, it regularly paid cost recovery charges for staff of customs posted at ICD, Bhiwadi till 31.03.2008, which fact is borne out from para 4 of the adjudication order dated 01.03.2013 passed by the Commissioner of Customs, Jaipur. 5. According to the appellant, it regularly paid cost recovery charges for staff of customs posted at ICD, Bhiwadi till 31.03.2008, which fact is borne out from para 4 of the adjudication order dated 01.03.2013 passed by the Commissioner of Customs, Jaipur. The appellant, in terms of the provisions of HCCAR, 2009, submitted compliance report to the Commissioner of Customs vide letter dated 16.07.2009 and also applied for renewal of approval of Customs Cargo Service Provider and Custodianship. However, the department kept the application in abeyance and did not pass any order for as long as two months. The Commissioner of Customs vide his letter dated 09.09.2009 required the Assistant Commissioner of Customs to inquire about the compliance, who submitted its report on 11.09.2009. Even before the compliance could be submitted, the Commissioner of Customs vide letter dated 18.09.2009 required the appellant to comply with the HCCAR, 2009 and granted extension up to 15.12.2009; then up to 20.01.2010 vide letter dated 15.12.2009; and thereafter up to 20.02.2010 vide letter dated 15.02.2010 and thereafter up to 16.09.2010 vide letter dated 01.04.2010. In the meantime, the appellant was availing the services of Handling and Transportation of Cargo from Max Logistics Private Limited for a long time. The appellant floated fresh tender for new contract for Handling and Transportation Services on 29.07.2009, which was awarded to M/s. Hasti Petro Chemical and Shipping Limited, Jodhpur. The appellant vide letter dated 17.08.2009 sought permission of the Commissioner of Customs in this regard. However, the Commissioner of Customs vide his letter dated 27.07.2009 advised to obtain the approval of the Commissioner of Customs. However, no reply was sent by the Commissioner. While, therefore, waiting for response of the Commissioner of Customs, the appellant again vide letter dated 07.09.2009 requested for grant of permission to outsource the Handling and Transportation of Cargo. The Commissioner of Customs, after considerable delay of three months, advised the appellant to get the contract vetted by a legal expert on 06.11.2009. The facilities of the ICD at Bhiwadi were adversely affected for this reason. The appellant has claimed that it has got the contract vetted from legal expert and submitted the same to the Commissioner of Customs vide letter dated 08.01.2010 with request to grant approval for outsourcing. The appellant vide letter dated 22.02.2010 again requested the Commissioner of Customs to grant permission to enter into contract for outsourcing. The appellant has claimed that it has got the contract vetted from legal expert and submitted the same to the Commissioner of Customs vide letter dated 08.01.2010 with request to grant approval for outsourcing. The appellant vide letter dated 22.02.2010 again requested the Commissioner of Customs to grant permission to enter into contract for outsourcing. The appellant vide letter dated 19.05.2010 clarified all the concerns of the Commissioner of Customs in relation to the contract. Since the grant of permission for handling and transportation was delayed by the Commissioner of Customs, the tender participant M/s. Hasti Petro Chemical and Shipping Limited filed Civil Writ Petition No. 1540/2010 before this Court. Consequently, the process for appointment of Handling and Transportation Agent could not be pursued any further. The appellant vide letter dated 23.07.2009 and 09.11.2010 again requested the Commissioner of Customs to grant permission to enter into contract of Handling and Transportation of Cargo, but no response was received. According to the appellant, owing to the aforesaid developments and apathy on the part of the respondents, the ICD at Bhiwadi remained non-functional and therefore the appellant did not generate any revenue. Since there was no custom work at ICD, Bhiwadi, no officer was ever deployed and therefore neither the department issued any demand note for cost recovery charges nor did the appellant pay any after September, 2009. 6. Further case of the appellant is that its Board of Directors, in 323rd meeting held on 26.03.2012, resolved to temporarily close the ICD and requested the Commissioner of Customs vide letter dated 12.04.2012 to suspend the approval/to withdraw the staff. The department immediately thereafter issued show cause notice dated 04.06.2012 to the appellant proposing to revoke/suspend custodianship in terms of Clause 11(1) of HCCAR, 2009 along with forfeiture of security, if any, for alleged failure to comply with the provisions of the Act and Rules/Regulations etc., recovery of outstanding cost recovery charges along with interest and imposition of penalty in terms of Clause 12(8) of HCCAR, 2009. The respondents thereafter appointed the Deputy Commissioner (Tech) as the Inquiry Officer in terms of Clause 12 of HCCAR, 2009. The appellant filed reply to the show cause notice on 22.08.2012 contesting allegations and repudiating the proposed action. The appellant thereafter appeared before the Inquiry Officer. The respondents thereafter appointed the Deputy Commissioner (Tech) as the Inquiry Officer in terms of Clause 12 of HCCAR, 2009. The appellant filed reply to the show cause notice on 22.08.2012 contesting allegations and repudiating the proposed action. The appellant thereafter appeared before the Inquiry Officer. However, the Inquiry Officer vide its report dated 08.10.2012 not only confirmed the charges but also recommended recovery of the cost recovery charges, suspension or revocation of the custodianship, and imposition of penalty under Clause 12(8) of the HCCAR, 2009. The appellant vide letter dated 21.11.2012 submitted written submissions contesting findings recorded in the inquiry report and prayed for dropping of the proceedings. The Commissioner of Customs, however, vide order dated 01.03.2013 confirmed the demand relating to the cost recovery charges of the costs of the customs staff unnecessarily posted at the ICD Bhiladi while the same was not functioning on account of inaction of the part of the Commissioner of Customs to grant permission in relation to outsourcing the handling and transportation of the cargo and further on account of stay order passed by this Court. The Commissioner of Customs also demanded the cost of customs staff arising due to retrospective application of the recommendations of 6th Pay Commission and further interest on the demanded amount. The Commissioner of Customs also imposed penalty of Rs. 50,000/- alleging failure on the part of the appellant to comply with the provisions of the Act, Rules and Regulations made thereunder. Similarly, in other two appeals, adjudicating orders were passed by the Commissioner of Customs on 06.11.2012 and 19.08.2013. 7. The appellant filed appeals before the Tribunal challenging aforesaid orders. The Tribunal vide common judgment dated 30.12.2016 dismissed the appeals. Hence, these appeals. 8. Mr. Prakul Khurana, learned counsel for the appellant argued that the obligation to pay cost recovery charges and its quantum have been disputed by the appellant. Details have not been provided in the show cause notice as to how the amount demanded has been reached so as to give proper reply. The cost recovery charges have been contested on various grounds as stated in the reply to show cause notice. The defense submissions have not been recorded in the adjudication order, therefore, the findings recorded in its para 4 that cost recovery charges payable have not been disputed is perverse. The cost recovery charges have been contested on various grounds as stated in the reply to show cause notice. The defense submissions have not been recorded in the adjudication order, therefore, the findings recorded in its para 4 that cost recovery charges payable have not been disputed is perverse. This goes to show the biased manner in which the adjudication order has been passed by the Commissioner of Customs. 9. Learned counsel further submitted that the obligation undertaken by the appellant to pay cost recovery charges cannot be stretched too far to be construed to say that the appellant agreed to pay cost recovery charges in all the situations notwithstanding the default/lapse/negligence on the part of the customs department in discharging reciprocal obligation cast on them under Regulation 6(2) to grant permission to outsource activities etc. Clue can be taken from section 51 of the Indian Contract Act, which is based on the principle of equity and fairness. section 52 of the Contract Act absolves a party to the contract from his obligation to discharge its duties unless the other party having reciprocal obligation is ready and willing to perform his reciprocal obligation. Even the undertaking to pay cost recovery charges is a qualified undertaking. It specifically records that the Commissioner of Customs shall decide the number of staff, which is required to be posted in the facility considering the work load in the station. The stand of the department that they have no power to remove customs officer once posted, is false and malafide. 10. Learned counsel argued that the Commissioner of Customs being a party to the dispute could not have acted as judge in its own cause and the dispute ought to be adjudicated by a neutral body, which can be a competent civil court. Alternatively and without prejudice, it is submitted that the Commissioner of Customs at the most under HCCAR, 2009 could have decided on the issue of suspension and revocation of custodianship and not adjudicated on the issue of disputed cost recovery charges. Clause 11 and 12 of HCCAR, 2009 only authorised him to decide on revocation/suspension and nothing beyond. The procedure prescribed is also for suspension or revocation of approval and imposition of penalty and nothing beyond. Therefore, the order passed by the Commissioner of Customs directing recovery of disputed cost recovery charges is without jurisdiction being ultra vires to HCCAR, 2009. Clause 11 and 12 of HCCAR, 2009 only authorised him to decide on revocation/suspension and nothing beyond. The procedure prescribed is also for suspension or revocation of approval and imposition of penalty and nothing beyond. Therefore, the order passed by the Commissioner of Customs directing recovery of disputed cost recovery charges is without jurisdiction being ultra vires to HCCAR, 2009. The remedy with the customs department under the facts and circumstances of the case was only to file suit for recovery before the competent civil court. The provisions of the Act cannot be invoked to recover disputed cost recovery charges. The show case notice itself records that cost recovery charges have been paid till 30.06.2009. 11. Learned counsel submitted that the Tribunal has accepted the perverse findings recorded in the adjudication orders as gospel truth. The Tribunal, being the last fact finding authority, ought to have vouched for the correctness of the findings, however the Tribunal derelicted in its duty. No independent finding has been recorded by the Tribunal and the only reason assigned for upholding adjudication orders is that finding is detailed/clear. There is also no reasoning as to how the decision of the Commissioner of Customs to deny permission for outsourcing was correct or the stand of the Commissioner that permission granted will amount to virtually handing over ICD to the third party was correct to come to the conclusion that the Department of Customs was correct in denying permission. It is submitted that all these aspects are disputed questions of fact which require fair adjudication by an independent authority. No cogent reasoning has been given by the Tribunal on the jurisdictional issues raised by the appellant. Without prejudice to above, it is submitted that HCCAR, 2009 came into force on 17.03.2009 and as per Regulation 4, the maximum period of one year can be granted by the Commissioner to the appellant to comply with the regulation i.e 17.03.2010. Therefore, the action of the Commissioner of Customs to order recovery of the cost recovery charges beyond 17.03.2010 or even allegedly keeping the officers posted beyond that date is ultra-vires to HCCAR, 2009 itself and thus demand itself is void. 12. Therefore, the action of the Commissioner of Customs to order recovery of the cost recovery charges beyond 17.03.2010 or even allegedly keeping the officers posted beyond that date is ultra-vires to HCCAR, 2009 itself and thus demand itself is void. 12. It is argued that reliance placed by the respondents on the judgment of Madras High Court in M/s. Hari CFS vs. Union of India & Others, (Writ Petition (MD) No. 2634 of 2009 along with other writ petitions decided on 04.02.2011) is wholly misconceived. The aforesaid judgment is distinguishable on the facts of the present case and the same does not in any manner apply to the present case. It is argued that the view of the Madras High Court in Hari CFS (Supra) ought not be concurred by this Court as the Madras High Court therein had referred to the decision of the Supreme Court in the case of Government of Maharshtra vs. Deokar's Distillery wherein the interpretation of Section 58A of the Prohibition Act was made, which is not the present case. It is a settled position of law that terms of the contract cannot be read as statute and the real intention of the parties at the time of entering agreement has to be gathered. The aforesaid decision of the Supreme Court is also distinguishable for the reason that in para 26 of the said extracted decision of the Supreme Court it is evident that "because there is no limitation of any kind in Section 58A of the Prohibition Act to the effect that the costs are to be recovered only in advance......" which is not the present case as the appellant was obliged to pay 1.85 times in advance. Further, in para 29 of the said judgment, it has been recorded that licensees gave an undertaking to abide by all the rules of the Prohibition Act and under Rule 17(43) of Rules of 1966 and under Rule 6(36), there are residuary powers of making a demand in special circumstances not foreseen under Rule 17(12) of the Rules of 1966. Further, in para 30 of the aforesaid Supreme Court judgment, it is stated that licensee shall abide by the orders made from time to time under the Prohibition Act, which is not the situation in present case. 13. Learned counsel submitted that the Kerela High Court in Union of India and Anr. Further, in para 30 of the aforesaid Supreme Court judgment, it is stated that licensee shall abide by the orders made from time to time under the Prohibition Act, which is not the situation in present case. 13. Learned counsel submitted that the Kerela High Court in Union of India and Anr. vs. National Tyre and Rubber Company W.A 891 of 2005 which has been extracted in para 11 in the case of M/s. Hari CFS (Supra) has held that since in the bond executed there is no clause obliging the petitioner therein to meet the additional burden due to revision of pay on account of the 6th Pay Commission, the petitioner cannot be made liable to pay the amount. This judgment is directly applicable to the present case as in the undertaking given at Annexure 4 also no such stipulation was mentioned. Lastly, learned counsel submitted that the penalty imposed on the appellant is wholly unjustified as the appellant is a State Government Undertaking and therefore no willful default can be attributed to it for non-payment of cost recovery charges. Learned counsel in support of his arguments relied upon judgment of the Supreme Court in State of Karnataka vs. Shree Rameshwara Rice Mills, Thirthahalli, (1987) 2 SCC 160 and judgment of High Court of Chhattisgarh at Bilaspur in Kymore Engineering Works Pvt. Ltd. vs. State of Chhattisgarh & Others, (Writ Petition (C) No. 817 of 2016 decided on 02.08.2017). 14. Mr. Anuroop Singhi, learned counsel for the respondents opposed the appeals and submitted that the Commissioner of Customs was justified in passing the impugned adjudication orders and the Tribunal was also equally justified in confirming the same. Learned counsel referred to Clause 5(2) of HCCAR, 2009 and argued that according to said clause, the appellant had undertaken to bear the cost of the Customs officers posted at such customs area on cost recovery basis, by the Commissioner and shall make payments at such rates and in the manner prescribed, unless specifically exempted by an order of the Ministry of Finance, Government of India. The appellant did not take timely action in fulfilling all the requirements in terms of HCCAR, 2009 despite of repeated extension of time granted by the Commissioner of Customs. Even after expiry of one year time provided as per HCCAR, 2009, the appellant did not comply with all the conditions of HCCAR, 2009. The appellant did not take timely action in fulfilling all the requirements in terms of HCCAR, 2009 despite of repeated extension of time granted by the Commissioner of Customs. Even after expiry of one year time provided as per HCCAR, 2009, the appellant did not comply with all the conditions of HCCAR, 2009. The appellant was appointed as the custodian of ICDs under Section 45(1) of the Act read with Public Notice No. 21/1999 (Customs) dated 01.12.1999 issued by the Commissioner of Customs, Jaipur. The procedure for appointment has been elaborated in the Board's Circular No. 128/95-Customs dated 14.12.1995. It is also noted that upon their appointment as custodians the Ministry of Finance created specific posts of customs staff for managing the ICDs. The same was duly notified. One of the primary conditions of appointment of custodian is that they have to pay the cost recovery charges to the department towards deployment of Officers and staff to attend to the Customs work in the notified ICDs. 15. Learned counsel referred to Circular of the Board No. 128/95-Customs dated 14.12.1995 wherein the procedure of appointment of custodian of ICDs was prescribed and also that the custodian was required to pay the cost recovery charges. Learned counsel referred to Para 3 of letter dated 24.07.1996 whereunder the sanction of the President for creation of post for ICD Bhilwara was conveyed. It was specifically stipulated that 1.85 times of the monthly average cost of the posts plus DA, CCA, HRA and interim relief may be obtained from the party, who is running the ICD as the posts have been created for ICDs. The appellant vide its letter dated 04.03.1988 communicated its acceptance of guidelines given in Circular No. 128/95 dated 14.12.1995 and furnished undertaking on stamp paper. The appellant was, therefore, under obligation to pay cost recovery charges together with interest and penalty in accordance with provisions of Clause 5(2) read with Clause 6(1)(o) of HCCAR, 2009. Learned counsel, in support of his arguments, relied upon the judgment of the Madras High Court in M/s. Hari CFS vs. Union of India & Others, (Writ Petition (MD) No. 2634 of 2009 along with other writ petitions decided on 04.02.2011). Learned counsel submitted that validity of HCCAR, 2009 has not been challenged by the appellant at any stage, therefore, it would be bound by the provisions thereof. Learned counsel submitted that validity of HCCAR, 2009 has not been challenged by the appellant at any stage, therefore, it would be bound by the provisions thereof. In support of his arguments, learned counsel also relied upon the judgment of Bombay High Court in Mumbai International Airport Private Limited vs. The Union of India, 2015 (1) Bom CR 472. 16. We have given our anxious consideration to rival submissions and carefully examined the material on record. 17. The controversy involved in the present matters stands covered not only by judgment of Madras High Court in M/s. Hari CFA (supra), but also by two subsequent judgments; one by the Division Bench of Bombay High Court in M/s. Mumbai International Airport Private Limited vs. The Union of India & Others (Writ Petition NO. 584 of 2013 and 697 of 2013 decided on 13.10.2014) and another by Division Bench of Delhi High Court in Allied ICD Services Ltd. vs. Union of India & Others (Writ Petition (C) No. 13770/2009 along with other connected matters decided on 27.08.2018). 18. The Delhi High Court in the aforesaid case of Allied ICD Services Ltd. (supra) was also considering challenge to the levy and collection of cost recovery charges for posting of and work performed by the custom officers and staff at the Inland Container Depots (ICDs)/Container Freight Stations (CFSs)/Air Cargo Complexes (ACCs)/Export Processing Zones (EPZs). Prayer in the aforesaid case was also made for quashing of the demand issued for recovery of cost of custom staff at the rate of 1.85 times the salary of the customs staff posted at the respective ICDs/CFSs/ACCs/EPZs. The Delhi High Court in that case held that the ICDs/CFSs/ACCs/EPZs located in the hinterland are operated by the custodians for their private commercial gains and profits. The Government merely facilitates the operation of the ICDs/CFSs/ACCs/EPZs by providing the required services by posting custom officials at these stations. Additional costs have been incurred by the Government for the services of the staff and posted them at the ICDs/CFSs/ACCs/EPZs to show correlation between the services provided and the cost recovery charges, to establish quid pro quo. It was further held that the petitioners companies therein charge certain amount per container from the exporter/importer. In this manner cost recovery charges paid to the Government was recouped and passed on to the importer/exporter. It was added to the expense or cost. It was further held that the petitioners companies therein charge certain amount per container from the exporter/importer. In this manner cost recovery charges paid to the Government was recouped and passed on to the importer/exporter. It was added to the expense or cost. It was treated as element and part of service rendered to the importer/exporter. It was therefore held that the petitioners therein, in turn, would be bound to make payment as the cost recovery charge for the posting of the custom officers at the said ICDs/CFSs/ACCs/EPZs. The Delhi High Court also held that the cost recovery charges are also payable as per Clause 5(2) of the HCCAR, 2009, which have been framed in terms of Section 157 and 158 of the Act. 19. The relevant observations made by the Delhi High Court in Allied ICD Services Ltd. (supra) in para 27, 28, 32 to 34 of the Report are quoted hereunder: "27. The petitioners had obtained the necessary permissions from the respondent No. 2 for establishment of the ICDs/CFSs/aCcs/ EPZs and thereafter, the petitioners were appointed as custodians of goods meant for import/export. Areas within ICDs/CFSs/ACCs/ EPZs, were declared as Customs area for the purpose of the Act. The petitioners were required to comply and had accepted that they would comply with the provisions of the Act applicable to the ICDs/CFSs/ACCs/EPZs. They had executed a bond together with bank guarantees in favour of the respondent No. 3. The bonds together with appropriate bank guarantees were executed, primarily to ensure the compliance with the provisions of the Act and for indemnifying the customs authorities for any loss of duty suffered due to any negligence on the part of the petitioners companies. Accordingly, and in terms of Section 45 of the Act and Regulation 5(2) of Handling of Cargo in Customs Area Regulations, 2009, that the circular dated 14th December, 1995 and the impugned letter of the Ministry of Finance dated 1st April, 1991 have been issued. 28. Petitioners as a pre-condition for becoming custodians of the respective ICDs/CFSs/ACCs/EPZs had willingly undertaken to bear the costs of the Customs staff posted at the ICDs/CFSs/ACCs/ EPZs. Thus, the payment of cost recovery charges has sanction and authority of law to back the levy and imposition. Further, the cost recovery charges so levied are against expenses incurred by the government for rendering the services at the ICDs/CFSs/ ACCs/EPZs. Thus, the payment of cost recovery charges has sanction and authority of law to back the levy and imposition. Further, the cost recovery charges so levied are against expenses incurred by the government for rendering the services at the ICDs/CFSs/ ACCs/EPZs. Therefore, in view of the case law above discussed, provisions of the Act and the documents on record, it is established that cost recovery charges are in the nature of "fee" for services rendered by the customs officers at the concerned ICDs/CFSs/ACCs/EPZs. 32. It is a fact that the cost recovery charges have been worked out and were/are payable by the Department of Revenue on the basis of general principles laid down in the General Financial Rules. As a condition for being appointed as a custodian, the petitioners had undertaken to bear the cost of the customs staff posted at the ICDs/CFSs/ACCs/EPZs. Cost was/is liable to change if the different components of this cost, such as, the salary, D.A., CCA, HRA, pay allowance and pension contribution at the rates in force from time to time etc. were/are changed. After the implementation of the recommendations of the 6th Pay Commission, these components had undergone a change and as a result, the cost of the staff as worked out and was payable. Similar would be the position on implementation of the 7th pay Commission report. 33. In view of the Rules 112 and 113 of the General Financial Rules, recoveries of expenditure of the services rendered to both the government and non-government parties are to be classified as receipts and the entire cost shall be recovered from the public or private body so that the net cost to the government is nil. If the revision in cost due to implementation of the 6th Pay Commission was not carried out, then the government would had suffered a net loss and would have tantamounted and resulted in profiting of the private sector at the expense of the government. Cost recovery @ 185% of the total salary of staff actually posted at ICDs/CFSs/ACCs/EPZs of the petitioners was being done as per the Board's instructions issued under F.No.434/12/92/-CUS dated 05.06.1992, Circular Nos.128/95-CUS dated 14.12.1995, 133/95-CUS dated 22.12.1995, 52/97 dated 17.10.1997 and 80/98-CUS dated 20.10.1998. 34. Customs officers may perform statutory or sovereign functions, however, the sovereign is not liable to provide service and permit setting up ICDs/CFSs/ACCs/EPZs. 34. Customs officers may perform statutory or sovereign functions, however, the sovereign is not liable to provide service and permit setting up ICDs/CFSs/ACCs/EPZs. Additional posts are created/sanctioned for the ICDs/CFSs/ACCs/EPZ for which the developer undertakes to bear the cost of the staff posted. The payment is in the nature of fee for the services rendered. Further, payment of cost recovery charges for the customs officers who are posted for manning such additional facilities is one of the conditions of appointment as a custodian in terms of Notification under Section 45(1) of the Act and Regulation 5 (2) of the impugned Regulation. In this regard, necessary undertakings were given by the petitioners before they were so appointed as custodian under Section 45 of the Act. They are therefore bound to bear the cost of the customs staff, posted for the ICDs/CFSs/ ACCs/EPZs. The payment of cost recovery charges by the custodian of ICDs/CFSs/ACCs/EPZs has the statutory force of law and is within the jurisdiction of the respondents." 20. Appointment of the appellant in the present cases as custodian of the ICD has been made in terms of Section 45(1) of the Act according to which all imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the Commissioner of Customs until they are cleared for home consumption or are warehoused or transshipped. Sub-section (2) of Section 45 of the Act provides that the person having custody of any imported goods in a customs area, whether under the provisions of sub-section (1) or under any law for the time being in force, (a) shall keep a record of such goods and send a copy thereof to the proper officer; (b) shall not permit such goods to be removed from the customs area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer. HCCAR, 2009 have been framed in terms of Sections 157 and 158 of the Act. Clause 5(2) of HCCAR, 2009 provides that the applicant shall undertake to bear the cost of the customs officers posted at such customs area, on cost recovery basis, by the Commissioner and shall make payments at such rates and in the manner prescribed, unless specifically exempted by an order of the Ministry of Finance, Government of India. Clause 5(2) of HCCAR, 2009 provides that the applicant shall undertake to bear the cost of the customs officers posted at such customs area, on cost recovery basis, by the Commissioner and shall make payments at such rates and in the manner prescribed, unless specifically exempted by an order of the Ministry of Finance, Government of India. Clause 5(5) of HCCAR, 2009 provides that the applicant shall undertake to comply with the provisions and abide by all the provisions of the Act and the rules, regulations, notifications and orders passed thereunder. Since payment of cost recovery charges for the customs officers posted for manning the facilities provided at ICD was one of the conditions of appointment of notice issued under Section 45(1) of the Act, the Government was fully justified in prescribing levy of such charges @ 1.85 times of the salary of the customs officers. 21. In view of above, the respondent was fully justified in computing such charges @ 1.85 times of the salary of the customs officers which may also include benefit of revised pay scales consequent upon acceptance of recommendations of VI and VII Pay Commissions, as the case may be. There is, therefore, nothing illegal on the part of the respondent for insisting on recovery of differential charges of the salary upon implementation of revised pay scale rules. In the light of view expressed by the Delhi High Court in Allied ICD Services Ltd. (supra) with regard to payment of differential amount of revision of pay scale, we do not concur with the view expressed by Kerala High Court in Union of India & Another vs. National Tyre and Rubber Company (supra). 22. Madras High Court in M/s. Hari CFS (supra) also dismissed the similar writ petition holding thus: "7. The contention of the petitioners were that the Officers of the Customs department are performing their statutory duties under the Customs Act. Their function is a sovereign function. No fee can be levied for the discharge of statutory or sovereign function. The Government is empowered to levy Customs Duty under section 12 of the Customs Act. Therefore, further cost recovery is void ab initio and violative of Articles 14 and 265 of the Constitution of India. The cost recovery made by the respondents is nothing but a fee. Charging at the rate of 185% of total salary of the Customs Officers is extravagant and exorbitant. Therefore, further cost recovery is void ab initio and violative of Articles 14 and 265 of the Constitution of India. The cost recovery made by the respondents is nothing but a fee. Charging at the rate of 185% of total salary of the Customs Officers is extravagant and exorbitant. Even in other ports, writ petitions have been filed questioning the recovery of charges for payment to the Customs Officers. Any revision of pay scale by the Central Government will apply to payment of salary by the Union Government to its employees. If any retrospective effect were to give on such revision of scales of pay, that cannot be passed on to the handlers of Export and Import. It is also stated that the Kerala High Court in similar circumstances had upheld the case of the petitioners. 9. At the CFS and ICDs, the Customs personnel are provided on a cost recovery basis. The sanction of postings of officers will be issued by the administrative wing of the Central Board of Excise and Customs. The custodians are required to pay 185% of total salary of the officers actually posted at the CFS. Normally one CFS will have 13 officers of various ranks. As per the guideline, dated 14.12.1995, more particularly guideline No.10, it is the Custodian who shall bear the cost of the Customs personnel posted for various duties at ICD/CFS/EPZ. Further by a notification No. 26/2009, the Government by the exercise of its power under section 141(2) of the Customs Act had issued new regulations known as Handling of Cargo in Customs Areas Regulations, 2009. Regulation 3 has made its regulations to come into effect with retrospective operations. Under Regulation 5, it is clearly stipulated that the Custodian shall bear the cost of Customs staff posted in the station. The Commissioner of Customs shall decide the number of staff required to be posted in the facility. It is also provided under condition No. (o) that the Customs Cargo provider shall bear the cost of customs officers posted at the Commissioner of Customs on cost recovery basis and in the manner specified by the Government of India, Ministry of Finance unless specifically exempted by an order of the Ministry. 12.....In normal circumstances, the officers of the Customs department perform their duty only in the Customs House located in the Gateway Port and they discharge different functions. 12.....In normal circumstances, the officers of the Customs department perform their duty only in the Customs House located in the Gateway Port and they discharge different functions. When ICD and CFS are running by Custodians for their own commercial gains and located in the hinterland, the cost recovery charges will have to be paid for the posting of customs officials who are additionally sanctioned for these ICDs and CFS over and above the regular posts. Running an ICD or CFS is a commercial proposition. The Government cannot bear the costs of additional manpower sanction. The services of the Customs officials are required throughout year during working hours. The cost recovery charges are in the nature of fees. The recovery at the rate of 1.85% of total salary is directly relatable to the additional creation of posts. Apart from the normal salaries, additional dearness allowance and notional HRA will have to be paid. Therefore, 1.85 times of the monthly average are collected as per the Government of India's letter, dated 1.4.1991. This 1.85% times was worked out by the Department of Revenue on the basis of principles laid down under the General Financial Rules. In terms of Rules 112 and 113 of the Financial Rules, recoveries of expenditures of the services rendered to both Government and Non Government parties are to be classified as receipts and the entire cost shall be recovered from the public or private bodies so that net expenditure of the Government is nil. Further, while calculating the cost recovery charges, apart from the cost of the staff includes the component of pay and allowances, contribution of pension will have to be recovered from their salaries. Therefore, there was no exorbitant claim in demanding 1.85 times. The obligations of Custodians are not merely flowing from the bonds executed by them, but the requirements of Customs Act will have to be followed. The judgment of Kerala High Court may not have any relevance, as it did not decide the issue relating to cost recovery charges to be met by the Custodians." 23. The Bombay High Court in M/s. Mumbai International Airport Private Ltd. (supra) also dealt with the same issue and repelled the challenge to imposition/levy of cost recovery charges. Relevant discussion made in para 53, 54, 57 and 59 of the Report reads as under: "53. The Bombay High Court in M/s. Mumbai International Airport Private Ltd. (supra) also dealt with the same issue and repelled the challenge to imposition/levy of cost recovery charges. Relevant discussion made in para 53, 54, 57 and 59 of the Report reads as under: "53. If that was not be the position, the Petitioners would not have furnished a bond as required by the authorities. It is in these circumstances that we are unable to agree with the Petitioners as they do not have any absolute exemption as claimed by them. The Petitioners have understood the law and its applicability to mean stepping into the shoes of a Authority like AAI does not mean automatic exemption. All custodians on which the status is claimed have to be complied with unless exempted. The staff of the Customs Department is deployed to enable the movement of goods from the notified Customs Area. That movement is possible only after the proper officer permits it. That proper officer is from the Department and if he is posted with a specific subject and purpose, then, charges of such posting will have to be borne by the Petitioners. 54. There is justification for the argument of the Respondents that even if there was a certain exemption in favour of their predecessor in title or the Airport Authority of India that is specific and qua the premises. That could be qua part or whole of the premises transferred. The Respondents have clarified that custodianship for part of the Air Cargo Complex was transferred to Air India by the Airport Authority of India. That is why the exemption enjoyed by these two entities and claimed by the Petitioners is restricted to the area. The Perishable Cargo Complex is a facility which has been developed and with the participation of another entity. That was not covered as original premises and under the Notification issued on 19th October, 2002. Therefore, as regards this Perishable Cargo Terminal, there cannot be any exemption. Similarly, the argument of the Respondents that in the backdrop of the Circulars and Notifications referred by us above, it is apparent that none of the functions under the Customs Act could be discharged and carried out nor the power exercised in that behalf, except by the officers functioning under the Customs Act is accurate. The Customs staff is under control of the Commissioner of Customs. The Customs staff is under control of the Commissioner of Customs. It is in these circumstances that it is fallacious to argue that the staff of this Customs Department reports to other entities much less the Petitioners. None can displace them or take over their duties and functions which are statutory. Even if that is not the position in law still it would be open for the authorities under the Customs Act to call upon parties like the Petitioner to pay the costs and charges in respect of the staff of the customs department posted at the terminal or in the area which is a notified Customs area. If this staff is posted to work there at and since the area or premises are claimed by the Petitioners, then, all the more, by their understanding and agreement itself, they have to pay the charges. 57. We find that reliance by Mr. Jetly on Exhibit 7 to the affidavit in reply is, thus, well placed. There the Perishable Cargo Terminal permission refers to the Handling of Cargo in Customs Area Regulations, 2009. As per para 4 (XXIII) thereof, the Petitioners have to bear the charges of the Customs staff posted at the Perishable Cargo Terminal by the Commissioner of Customs, Air Cargo Complex, Mumbai on cost recovery basis. The Petitioners would not have been permitted to outsource the function of handling of Cargo within this terminal premises unless the Regulation 6(2) of these Regulations had permitted them to do so. Further, they could not have been appointed as custodian and within the meaning of the said term and as contemplated section 45 of the Customs Act, 1962, unless, they subjected themselves to these provisions. That they did so voluntarily does not mean that they can pick and choose favourable or beneficial terms and conditions and leave our or omit the so called onerous one's. Therefore, "shall remain in custody of such person" are the relevant words and to understand the concept. The permission to set up a Perishable Cargo Terminal for exports was sought by the Petitioners. That the facility was constructed by the Cargo Service Centre India (P) Ltd. on a Build, Operate and Transfer basis is clear from Exhibit 7' to the affidavit in reply. That entity is also designated as "Customs Cargo Service Provider" is further clear. The permission to set up a Perishable Cargo Terminal for exports was sought by the Petitioners. That the facility was constructed by the Cargo Service Centre India (P) Ltd. on a Build, Operate and Transfer basis is clear from Exhibit 7' to the affidavit in reply. That entity is also designated as "Customs Cargo Service Provider" is further clear. The function of Cargo is outsourced but the Petitioners appointment as custodian under the Customs Act is not disturbed and remains untouched. Therefore, conditional approval contained in Exhibit 7' binds the Petitioners or else the approval would fall. Once the permissions have been sought and from the various authorities under the Customs Act, then, it is not proper to urge that the conditions imposed by such authorities will not be binding. 59. For these reasons, we do not find any substance in this Writ Petition. Rule is discharged in both of them." 24. The Bombay High Court in the aforesaid judgment did not agree with the view taken by the Andhra Pradesh High Court in GMR Hyderabad International Airport Ltd. vs. Central Board of Excise and Customs (Writ Petition No. 27840 of 2010) and held in para 61 of the Report as under: "61. We do not decide any larger controversy. As far as the judgment of the Andhra Pradesh High Court is concerned, we find that there as well, the learned Single Judge has without in any manner appreciating the position of the Customs Officers and their authorities under the Act held that Regulation 5(2) purports to levy a tax. We are of the opinion that cost recovery charges are not being recovered from the importer/exporter. It is because the Petitioners under a specific document sought the approval firstly, to set up a Perishable Cargo Terminal and for exports. That was granted and in that terminal, services of the Customs staff had to be provided so as to enable the goods exported being cleared therefrom. For the purposes of clearance of imported and exported goods, and making of entries in relation thereto, by the proper Officer before a importation and equally for home consumption and payment of import duty, enabling recovery thereof in accordance with law that the customs staff alone would be in a position to take the requisite steps. They alone are competent to administer and implement the Act. They alone are competent to administer and implement the Act. That their services are utilized is clear and therefore the reimbursement of the charges incurred on them is undertaken to be made by the Petitioners. Such a payment and of cost recovery charges does not come within the ambit of the controversy dealt with by the Hon'ble Supreme Court. It is in these circumstances that this is a payment and more particularly by way of reimbursement of the costs in relation to such staff. That staff is deployed by the department of Customs and particularly the Commissioner. In such circumstances, and with great respect, we are unable to agree with the learned Single Judge of the Andhra Pradesh High Court. We find much substance in the contentions of Mr. Jetly that these matters cannot be looked at from the angle and in the manner approached by the Petitioners." 25. Circular of the Board No. 128/95-Customs dated 14.12.1995 prescribed the procedure for appointment of custodian of ICDs and also stipulated that the custodian was required to pay the cost recovery charges. The Ministry of Finance upon appointment of custodian, specifically created posts of custom staff for manning the ICDs. Letter dated 24.07.1996 has been placed on record, in para 3 of which, the sanction of the President for creation of posts for ICDs was conveyed. Therein it was specifically stipulated that 1.85 times of the monthly average cost of the posts plus DA, CCA, HRA and interim relief may be obtained from the party, who is running the ICD as the posts have been created for ICDs. In fact, the appellant vide letter dated 04.03.1988 communicated its acceptance for the guidelines contained in Circular No. 128/95 dated 14.12.1995 and furnished undertaking on stamp paper. There is, therefore, nothing illegal in demand of the cost recovery charges together with interest and penalty. In the facts of the present case, it cannot be said that levy of cost recovery charges by the respondent was without due notice and prior adjudication by the Government authority. 26. Contention of learned counsel for the appellant that since the respondent did not permit it to outsource the service, therefore, operation of ICDs remained suspended for quite some time and it cannot be saddled with the cost recovery charges, is noted to be rejected. 26. Contention of learned counsel for the appellant that since the respondent did not permit it to outsource the service, therefore, operation of ICDs remained suspended for quite some time and it cannot be saddled with the cost recovery charges, is noted to be rejected. The respondent was not under legal obligation to allow the appellant to outsource the work of ICD through a third party. The respondent was no where privy to the agreement between the appellant and M/s. Hasti Petro Chemical and Shipping Limited. Even if the contract between the appellant and M/s. Hasti Petro Chemical and Shipping Limited was not finalized for quite some time, it would not absolve the appellant from its liability to run the ICD in terms of its appointment as custodian under Section 45 of the Act. In fact, the dispute arose between the appellant and M/s. Hasti Petro Chemical and Shipping Limited, who approached this Court by filing writ petition and the process of handling and transportation has to be abandoned by the appellant. But the fact remains that the respondent had specifically created certain posts for posting of staff of customs department and they continued to remain posted there all throughout. The appellant, therefore, cannot escape the liability to pay the cost recovery charges. 27. Argument that the Commissioner of Customs being a party to dispute could not have acted as judge in its own cause and the dispute ought to be adjudicated by a neutral body, which can be a competent civil court is also noted to be rejected. In the nature of the present case, arithmetical computation done by the Commissioner of Customs, would in no manner, attach any disability to him to make such computation because he did so in the same manner as he computes the customs duty in any other case. Such computation is subject to challenge by the appellant before the Tribunal and in fact, the appellant had challenged the same before the Tribunal which has upheld the same. We are, therefore, not inclined to uphold the argument that rather than computing the cost recovery charges, the Commissioner of Customs ought to have filed civil suit for such recovery. Such computation is subject to challenge by the appellant before the Tribunal and in fact, the appellant had challenged the same before the Tribunal which has upheld the same. We are, therefore, not inclined to uphold the argument that rather than computing the cost recovery charges, the Commissioner of Customs ought to have filed civil suit for such recovery. Judgment of the Supreme Court cited on behalf of the appellant in State of Karnataka vs. Shree Rameshwara Rice Mills, Thirthahalli (supra) and judgment of the High Court of Chhattisgarh in Bilaspur in Kymore Engineering Works Pvt. Ltd. (supra) are wholly distinguishable on the facts of the present case and do not afford any help to the appellant. 28. In view of above discussion, we do not find any infirmity in the view taken by the Tribunal in its judgment and the adjudication order. There is no merit in these appeals and they are hereby dismissed. 29. Stay Applications No. 2136/2017, 2137/2017 and 2138/2017 also stand dismissed. 30. Office is directed to place a copy of this judgment on record of each connected appeal.