Calcutta High Court Directs South Eastern Railway To Refund Additional 20% Surcharge Levied On Consignment

The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya and Justice Uday Kumar has held that an impugned judgment passed by the Railway Claims Tribunal, Kolkata whereby the appellant's claim for refund of 20% surcharge was refused is erroneous in law and perverse. Court said that the tribunal overlooked the obvious legal effect of the Circulars and Goods Tariff documents before it, which were the only documents which would have any bearing on the adjudication. Thus the court allowed the claim for relaxation regarding an additional 20% surcharge incorporated by the Circular. Additionally, the court held that the required documents being public records and authored by the respondent, there was no liability on the part of the appellant to produce or prove the same. It was for the Railways to produce the Circulars, if so, required by the Tribunal. Brief Facts: The appellant booked consignments of Naptha (SRN) on 12 different dates with the South Eastern Railway and a 20% surcharge was levied on the said consignments. Then, the appellant filed a claim before the Railway Claims Tribunal for a refund of the 20% surcharge. The Tribunal rejected the claim of the appellant. Aggrieved by this, the appellant filed an appeal before the High Court challenging the impugned judgment passed by the Railway Claims Tribunal, Kolkata. The appellant argued that the Circular dated October 16, 2007, issued by the Railway Board, Ministry of Railways, wherein the additional 20% surcharge was relaxed. By the said Circular, the expression “OR” in Column 6 of the IRCA Goods Tariff was replaced with “RR”. Since the consignments were booked in the year 2011, the said relaxation was applicable and, as such, the surcharge was levied unlawfully and ought to be refunded. However, the Railway contended that the consignment was booked under GT No.46, Part-I (Vol.-II), in which the Naptha was included under the main head. As such, Goods Tariff (GT) No.45, Part-I (Vol.-II) and Circular are not applicable since the appellant opted to book the consignments at RR rate. Also, the authorised employee of the Railways contended that even if the Circular is applicable, the charges would be levied as per Base Class 210 instead of 200, as appearing in Column No.8 of the General Classification of Goods. Observations: The court observed that in Clause 12.0 the abbreviation “OR” in Column No.6 (captioned as “Risk Rate”) was defined as “Owner's Risk”. As opposed to the same, the expression “RR” was defined as “Railway Risk”. The concept was that if the consignment was booked with the endorsement “OR” in the Risk Rate Column (Column No.6), the risk for the same would be covered by the owner. Whereas if the booking was with the endorsement “RR” under Column No.6, the risk would be of the Railways, for which payment of 20% surcharge was levied by the Railways. Also, the court noted that there was no option for the appellant to book a consignment by depicting “OR” under the Risk Rate Column, but the consignor would compulsorily have to book the goods as “RR”. Since the Circular replaced the endorsement “OR” with “RR”. Moving further, the court held that the Base Class for Petroleum Products and Gases was altered to 200 by the time the appellant's consignments were booked, even if the same was 210 previously, the relaxation regarding additional 20% surcharge incorporated by the Circular remained. Then, the court noted that the required documents being public records and authored by the respondent, there was no liability on the part of the appellant to produce or prove the same. It was for the Railways to produce the said Circulars, if so, required by the Tribunal. Thereafter, the court held that “the Circulars and the Goods Tariffs as well as the General Classification of Goods thereunder prevalent at the relevant point of time it is clearly seen that the consignments of the appellant fell under Base Class 200 under Column No.8 of such General Classification and had to be shown under the Risk Rate in Column No.6 as “RR”. On the relevant dates in October, 2011, no additional surcharge of 20% was payable for “RR” goods by virtue of Circular No.TCR/1078/2007/2 dated October 16, 2007.” The court held that the impugned judgment passed by the Tribunal is not only erroneous in law but perverse, since it overlooked the obvious legal effect of the Circulars and Goods Tariff documents before it, which were the only documents which would have any bearing on the adjudication. Finally, the appeal was allowed and directed the respondent to refund the additional 20% surcharge on freight to the appellant to the tune of Rs.1,14,05,071/-, along with interest at the rate of 6% per annum. Case Title: Indian Oil Corporation Vs. Union of India Case Number: F.M.A.T. No. 237 of 2017 Counsel for the Applicants: Mr. Kanish Kejriwal, Mr. Amit Meharia, Ms. Paramita Banerjee,...

Calcutta High Court Directs South Eastern Railway To Refund Additional 20% Surcharge Levied On Consignment

Soumya Chakrabarti

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Soumya Chakrabarti

Calcutta High Court Directs South Eastern Railway To Refund Additional 20% Surcharge Levied On Consignment

Soumya Chakrabarti

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INR 1099+GST

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Soumya Chakrabarti

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