TaxTMI 
TaxTMI 
2026 (8) TMI 534
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....in payment of Customs duty. 3. The Electronic Cash Ledger system was introduced by the Department under the Customs (Electronic Cash Ledger) Regulations, 2022. According to the appellant, it had registered itself on the ICEGATE portal and initiated payment of Customs duty within the prescribed time. However, due to technical glitches in the newly introduced payment system, though the amounts were debited from the appellant's bank account, the corresponding credit was not reflected in its Electronic Cash Ledger. Since the payment was not reflected in the Electronic Cash Ledger, the appellant was unable to generate the requisite challans and the Department was unable to grant "out of charge" electronically. On representations made by the appellant, manual "out of charge" was granted subject to exclusion of undertakings to pay differential duty, penalty, interest and other charges, if fund payable. The amounts remitted by the appellant were subsequently reflected in its Electronic Cash Ledger after a delay of about 15 days. The appellant thereafter generated challans for payment of Customs duty. As the challans were generated after the prescribed due dates, the electronic system co....
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....ment was therefore made under compulsion and cannot be regarded as interest validly levied under Section 47(2) of the Customs Act, 1962. 9. It is contended that an amount collected without authority of law does not acquire the character of duty or interest merely because it was described as such by the Department. Such an amount constitutes and unauthorized exaction and the limitation prescribed under Section 27 of the Customs Act would not apply to its refund. Learned Counsel accordingly prays that the impugned order be set aside and the Department be directed to refund Rs. 4,25,914/- to the appellant. 10. Learned Authorized Representative appearing for the Revenue supports the impugned order. He submits that the appellant itself approached the Customs Authorities by filing an application of the under Section 27 of the Customs Act for refund of the interest paid by it. Once the refund claim is filed before the statutory Customs Authorities, the same has necessarily to be examined in accordance with Section 27, including the limitation prescribed therein. 11. It is submitted that the interest was paid on 18.04.2023 and 22.04.2023, whereas, the refund application was filed ....
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.....2024. Thus, calculated from either of the dates of payment, the claim was filed after expiry of the statutory period. The principal contention of the appellant is that the amount collected as interest was without authority of law and, therefore, the statutory limitation under Section 27 would not apply. I am unable to accept the contention in the proceedings before me. 16. In the case of Mafatlal Industries Ltd., supra, the Constitution Bench of the Hon'ble Supreme Court held, by majority that claims for refund for duties collected under an unconstitutional or an erroneous of the taxing statute are ordinarily required to be pursued under the relevant provisions contained in the relevant enactment. The statutory procedure governing refund, including limitation and unjust enrichment, cannot be bypassed by describing the levy as illegal or unauthorized. The limited exception recognized in the judgment pertains to a levy imposed under an unconstitutional provision or otherwise falling within the exceptional category identified therein, in proceedings under the Constitutional Jurisdiction of the High Courts or the Supreme Court. The present proceeding is not writ petition invoking t....
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.... respectfully following the various judgments cited by learned AR and especially the majority decision in the case of Mafatlal Industries Ltd (supra), the provisions of Section 27 will be applicable in full force. The claim was filed before the customs authority, who is a creature of statute and therefore, he is bound by the provisions of the Act itself while considering the claim for refund unlike the Hon'ble High Courts and Hon'ble Supreme Court, who have wider jurisdiction and power under Article 226 and Article 32 of the Constitution respectively. It is also no longer res integra that the Tribunal is a creature of statute, which has to function within the four walls of statute itself. Therefore, in the facts of the C/30233/2024 case, no fault can be found with the rejection of the refund claim, which has admittedly been filed beyond the limitation period under the relevant statute i.e., Customs Act, 1962 and therefore, there is no ground for interfering with the order of the Commissioner (Appeals)." 19. In the case of P. Venkata Ramanaiah & Co., supra, the Hyderabad Bench considered a case in which the assessee had paid Service Tax in excess of the amount legally pay....
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....st be held to be collected, retained or not refunded as the case may be, under the authority of law. In other words, all 'illegal levy' are held to be collected without authority of law and to be refunded as prescribed under Section 11B of the Central Excise Act, 1944 and Section 27 of Customs Act, 1962. Further, it is very clearly laid down by the Hon'ble Apex Court that all refund claims except that of unconstitutional levy had to be and must be filed and adjudicated under the provisions of the Central Excise & Salt Act or the Customs Act, as the case may be. Further it is laid down that these acts provide a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to the Tribunal which is not a departmental organization, but to this court which is a civil court." 7. In view of the above, we find that the appeal is devoid of merit. Hence, the appeal is dismissed." 21. The Bench find that the wavier orders relied upon by the appellant themselves prescribed conditions for availing wavier or refund of interest, including payment within the stipulated period following restoration of the system and certification of the syst....