https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=770149 https://www.taxtmi.com/caselaws?id=770149 Refund of interest paid on import duty due to technical glitches in the Electronic Cash Ledger (ECL) system during the phased implementation starting 01.04.2023 - rejection on the ground that such refund is not admissible, in light of the Customs (Waiver of Interest) Third Order, 2023, Order No. 03/2023-Customs (NT) dated 17.04.2023 (Customs Order) read with Section 27 of the Customs Act, 1962. Bone of contention is that while the phased implementation of ECL in Customs was being initiated from 01.04.2023, there arose certain technical glitches in the functioning of ECL facility at the Common Portal, and thus, the delay in payment has attracted interest which the petitioner seeks refund of. HELD THAT:- The circular dated 17.04.2023 had of course provided for the refund of interest until the date of system inability removal, and for an additional three days thereafter, as stipulated in Annexure-7. This circular specifically addressed the waiver of interest payable under Section 47 (2) of the Act of 1962 for the period from 01.04.2023 upto and including 13.04.2023 in respect of such goods where the payment of import duty was to be made from the amount available in ECL. This Court finds that the advisory issued by the D.G. Systems which is the backbone of the determination of the date of the technical glitches which would be there in the implementation of the ECL facility, which require the D.G. Systems to pronounce and certify the same - the advisory thus, clearly envisages that for ICEGATE registered users, the date of removal of the system inability, in context to the third order dated 17.04.2023 would be the date of issue of advisory which is 27.07.2023. Thus, practically, the D.G. Systems has acknowledged that the technical glitches were existing till 27.07.2023. This Court finds that the order dated 17.04.2023 acknowledged the technical difficulties to have been resolved only to a large extent, but not entirely. The order dated 17.04.2023 itself stipulates the requirement of waiver of the interest as per the certification given by the D.G. Systems regarding the duty and interest from the date of removal of such system inability at the Common Portal. Since, the date of removal of system inability at the common portal has been certified by the D.G. Systems vide advisory dated 27.07.2023 to be 27.07.2023 itself, therefore, the respondents cannot claim interest and will have to refund any interest which has been taken by them for the transaction in question, particularly, when the petitioner made the necessary payments in pursuance of the bill of entry having been returned, though the payment itself may have a third party failure, which cannot be attributed to the present petitioner. The certification by the D.G. Systems of the technical difficulties in existence making the system having inability at the Common Portal upto 27.07.2023 clinches the issue of refund in accordance with Section 27 of the Act of 1962 read with the Circular dated 17.04.2023. Conclusion - This Court is firmly of the opinion that the impugned order dated 21.11.2023 suffers from inconsistency with conjoint reading of Section 47 and Section Act of 1962, order dated 17.04.2023, the advisory issued on 27.07.2023 and the effort of the petitioner to make the necessary payments to the Banks successfully on 20.04.2023 vide Annexure-8. Petition allowed. Case-Laws Customs Wed, 05 Feb 2025 00:00:00 +0530