2016 (3) TMI 610 - HC - Customs

Seeking refund of excess amount erroneously collected - Principles of natural justice - Import of Electro Plating Process and paid duty by online e-payment mode, while making payment the portal displayed a message Bank away server application error , whereby, the payment got debited nine times , thereby collecting an excess amount - Held that - since the third respondent is withholding the amount, excessively paid by the petitioners and when the second respondent himself has stated that the provisions of Sec.27 of the Customs Act are not applicable, the contentions, now raised by the learned counsel for the respondents, cannot be accepted. Therefore, the third respondent is liable to refund the amount excessively paid to the petitioner and the impugned order is set aside. - Decided in favour of petitioner

Summary

Issues:
Refund of excess duty paid due to online payment error, application of Sec.27 of the Customs Act for refund, rejection of refund application by third respondent, appeal to second respondent challenging rejection, delay in filing refund application, liability of the third respondent to refund the excess amount.

Analysis:

The petitioners imported goods and paid duty online, resulting in an error causing an excess payment of &8377; 1,92,760. Despite notifying the bank and corresponding with the authorities, the excess amount was not refunded. The third respondent rejected the refund application citing a delay of over a year as per Sec.27 of the Customs Act. The second respondent upheld the rejection, questioning the delay of almost 3 years in filing the refund application and deeming the petitioners negligent.

The second respondent contended that Sec.27 of the Customs Act does not apply as the claim was not for refund of duty, and the delay in filing the refund application was unjustified. However, the petitioners argued that they had been actively seeking a refund from 2012 to 2014, culminating in the formal application in 2015. The court noted the excess payment, the ongoing correspondence for refund, and the unjust withholding of the amount by the third respondent without valid reason.

The standing counsel for the respondents suggested approaching CESTAT under Sec.129-A of the Customs Act for relief. The court, considering the circumstances, held the third respondent accountable for refunding the excess amount of &8377; 1,92,760 to the petitioners, setting aside the orders of the second and third respondents. The respondents were directed to refund the amount within four weeks from the date of the court order, emphasizing the petitioners' entitlement to the refund. The writ petition was allowed without costs, closing the connected matters.