The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai, has held that an importer cannot be denied a refund of a duplicate customs payment merely because it could not produce a challan that the Department’s ICEGATE system failed to generate.

The bench of Dr. Suvendu Kumar Pati (Judicial Member) directed the Customs Department to refund ₹9,67,167 with applicable interest within two months of receiving its order and held that insisting on production of the missing challan placed the importer in an impossible position when the very basis of the refund claim was that no challan had been generated for the first payment. 

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The dispute arose from the clearance of goods imported through Jawaharlal Nehru Customs House. The importer filed Bill of Entry No. 4148551 dated July 20, 2019, and made the initial customs payment through Union Bank of India on July 21, 2019.

Although ₹9,67,167 was debited from its bank account, no corresponding challan was generated in ICEGATE. To secure clearance of the goods, the importer made another payment of ₹9,67,564 on July 22, 2019, which, according to the order, included one day’s interest of ₹307.

The importer subsequently filed a refund application on August 31, 2019, seeking return of the initial payment. It submitted banking records and other documents to establish that the amount had been paid twice against the same bill of entry.

The refund authority rejected the claim on January 12, 2021. The Commissioner of Customs (Appeals), Mumbai-II, upheld the rejection on September 29, 2022, prompting the importer to approach CESTAT.

Appearing for the importer, Advocate Devraj Kansara relied on JNCH Public Notice No. 62/2012 dated November 19, 2012, which addresses refunds arising from double or multiple customs payments.

The public notice recognised that a lack of synchronisation between the customs e-payment system and bank software could result in duplicate payments reaching the Government’s account. It clarified that an additional payment made after acceptance of the customs duty in the system constitutes a deposit with the Government, refundable by following the procedure under Section 27 of the Customs Act, 1962.

The importer argued that it had supplied the necessary documents but was nevertheless required to produce self-attested copies of both payment challans. Since the first challan had never been generated, compliance with that demand was impossible.

It also submitted a declaration from Union Bank of India dated June 17, 2026, confirming that the ₹9,67,167 debited on July 21, 2019, had not been reversed to its account on any subsequent date.

The importer sought a refund with interest at 12% from the date of payment.

The Department’s authorised representative, Krishna Azad, defended the appellate order. He contended that verification by the PAO/e-PAO regarding duplicate payments against the same bill of entry was mandatory.

According to the Department, that verification could not be completed because the importer had not furnished clear, self-attested photocopies of both challans. It maintained that the refund claim had therefore not been properly established.

CESTAT observed that there was no dispute over the importer’s eligibility to receive a refund of one of the duplicate payments. The controversy centred on its inability to produce both challans.

The Tribunal found that the refund authority’s own order recorded receipt of several supporting documents. These included the bill of entry, an e-payment transaction status receipt, a chartered accountant’s certificate, bank-certified payment details, and a certified bank statement reflecting both debits.

It further noted that the public notice allocated verification responsibilities to the appropriate departmental officer, including verification with the PAO and checks through the challan inquiry facility on ICEGATE.

The Tribunal held that rejection solely for non-production of both challans was improper. Such a requirement was not prescribed by the public notice, and the missing document resulted from failure of the Department’s system to record the payment and generate a challan.

The importer could not be made to suffer for that failure, the bench held. The bank’s subsequent confirmation that the initial debit had never been reversed further supported the claim.

On interest, CESTAT held that because the public notice required the refund procedure under Section 27 to be followed, Section 27A would apply once the refund remained unpaid beyond the statutory three-month period.

However, the Tribunal did not grant the requested 12% interest from the date of payment. It held that the applicable interest rate would be governed by the Government notifications issued for that purpose.

CESTAT set aside the Commissioner (Appeals)’s order and directed the Department to refund ₹9,67,167 with applicable interest as per law within two months of receipt of the Tribunal’s order. 

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