Customs Duty on Imports Mistakenly Paid Twice on Same Bills of Entry: CESTAT Orders Refund of Second Payment [Read Order]

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Mumbai has allowed a refund claim after holding that the company had paid customs duty twice on the same imports, which could not be legally retained by the authorities.

The company, Yazaki India - appellant had imported insulating fittings under two Bills of Entry dated 28.12.2018 and 29.12.2018, for which duty amounting to ₹5,35,010 was duly paid on 29.12.2018. However, due to an inadvertent error, the same amount was again deposited on 31.12.2018. Realising the duplication, Yazaki India filed a refund claim in January 2020, seeking return of the second payment.

The adjudicating authority, after verifying the duplicate payments with the Sr. Accounts Officer and the concerned bank, accepted that duty had indeed been paid twice but rejected the refund on the ground that the claim was filed beyond the statutory period of one year prescribed under Section 27 of the Customs Act, 1962. The Commissioner (Appeals) upheld the rejection, reiterating that limitation barred the refund.

In appeal before the Tribunal, the counsel of the appellant, Adv. Ramachandran Mattiyil submitted that since the customs duty for same goods was paid twice, the department cannot retain or withhold refund of duty, on the ground of insufficiency of documents or on limitation of time/ time bar.

The advocate argued that import duty under the Customs Act, 1962 can be levied only once on an import transaction, and the second payment was merely a mistaken deposit, not duty. Referring to Public Notice No. 62/2012 issued by JNCH, he contended that such double payments are treated as deposits with the government and therefore the statutory time limit for refund claims should not apply.

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The counsel relied on the decision of Swastik Sanitarywares Ltd. v. Union of India by Gujarat High Court and CESTAT rulings.

The Revenue, on the other hand said that in the absence of following the time limits within which the importer is required to file the refund application, allowing refund to the importer filed beyond such time limit under Section 27, is not permissible.

The Tribunal examined the Bills of Entry, challans, ICEGATE references confirming that the burden of duty was borne entirely by Yazaki India and had not been passed on. It held that once customs duty was lawfully discharged on the first occasion, the second deposit had no legal basis. Accordingly the bench directed to grant the refund of the second deposit.

The bench noting that the issue of refund arising on account of payment of duty/tax twice has been dealt with in detail by the by the High Court of Gujarat in the case of Swastik Sanitary wares Limited (supra), upon taking into account the judgement of the Supreme Court in Mafatlal Industries Ltd. Vs. Union of India, where it was ruled that the assessee is eligible for refund of the amount paid for the second time.

The bench of M.M. Parthiban (Technical member) observed that “the JNCH customs authorities in their Public Notice No.62/2012 dated 19.11.2012 have also state that double/multi payment of amount post acceptance of the amount of customs duty in the Customs EDI system is only a deposit with the government. I also find that the same principle is also carried forward in implementing the facility of Electronic Cash Ledger (ECL) functionality as envisaged in Section 51A of the Customs Act, 1962, vide Circular No. 09/2023-Customs dated 30.03.2023 issued, inter alia, for reducing instances of double duty payment as rejected payment will stay at the ECL for re-initiating payment of duties.”

Accordingly, CESTAT set aside the Commissioner (Appeals)’s order and directed refund of ₹5,35,010 to Yazaki India Pvt. Ltd., observing that the department cannot unjustly enrich itself by retaining amounts paid twice for the same import transaction. The appeal was allowed in favour of the appellant.

Adv. Ramachandran Mattiyil, Advocate for the Appellants and Dinesh Nanal, Authorized Representative appeared for the Respondent.

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