M/S Grain Energy Pvt. Ltd vs The Deputy Commissioner ...
2025 Latest Caselaw 6571 Raj

Rajasthan High Court - Jodhpur

M/S Grain Energy Pvt. Ltd vs The Deputy Commissioner ... on 5 February, 2025

Author: Pushpendra Singh Bhati

Bench: Pushpendra Singh Bhati

      [2025:RJ-JD:7191-DB]

             HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
                              JODHPUR
                        D.B. Civil Writ Petition No. 2899/2024

      M/s       Grain        Energy       Pvt.        Ltd.,        Bearing     Cin     No.
      U40300Dl2020Ptc363316, Registered Office At A-57, Dda Sheds,
      Okhla Industrial Area, Phase-Ii, New Delhi, Through Authorised
      Signatory Dilip Kumar S Mehta, S/o N Sumermall Mehta Aged
      About 58, C/o A-57, Dda Sheds, Okhla Industrial Area, Phase-Ii,
      New Delhi - 110020.
                                                                             ----Petitioner
                                             Versus
      1.       The Deputy Commissioner, Customs, Icd, Thar Dry Port,
               Jodhpur.
      2.       Central Borad Of Indrect Taxes And Customs, Through Its
               Chairman, Ministry Of Finance, North Block, Government
               Of India, New Delhi - 110001.
                                                                          ----Respondents


      For Petitioner(s)            :     Ms. Priyanka Rathi with
                                         Mr. Chirag Mathur.
      For Respondent(s)            :     Mr. Rajvendra Sarswat.



             HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

HON'BLE MR. JUSTICE CHANDRA PRAKASH SHRIMALI

Judgment

Reportable

05/02/2025

1. This writ petition under Article 226 of the Constitution of

India has been preferred claiming the following reliefs:

"(a) Issue a Writ of Certiorari or any other Writ or order or Direction of appropriate nature to set aside the Impugned Order dated November 21, 2023 passed by the respondent No.1;

(b) Issue a Writ of Mandamus or any other Writ or Order or Direction directing the Respondent to grant refund of INR.

2,95,781/- along with interest;

(c) Issue a Writ of Mandamus or any other Writ or Order or Direction directing the Respondent No.2 to extend the

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application of Custom Order No.3/2023 dated April 17, 2023;

(d) Pass any other order or orders as this Hon'ble Court deems fit and proper in the facts and circumstances of the present case;

(e) Dispense with the service of the advance notices upon the respondents.

(f) Exempt the petitioner from filing the certified/original copies of documents Annexures with permission to place on record true typed/photocopies of the same.

(g) Costs of the writ petition may also be awarded in favour of the petitioner."

2. The petitioner is a Company incorporated under the

Companies Act and engaged in commercial Solar Projects.

3. The present writ petition has been filed challenging the

Refund Rejection Order No.23-24/2023-24/Refund dated

21.11.2023 issued by respondent No.1.

4. Ms. Priyanka Rathi, learned counsel representing the

petitioner submits that the respondents had erroneously rejected

the refund of the interest claimed by the petitioner 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 (hereinafter referred to as "the Act of 1962").

4.1 Learned counsel further submits that Section 27 of the Act of

1962 is a general provision that allows any person to claim a

refund of duty or interest paid by him or borne by him, through an

application to the appropriate authority. Learned counsel contends

that the relevant circular specifically enables such refund of

interest, in cases, where technical glitches were encountered on

specific dates.

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4.2 Learned counsel also submits that the petitioner filed the

refund claims under the Customs (Waiver of Interest) Third Order,

2023, Order No.03/2023-Customs (NT) dated 17.04.2023

("Customs Order") read in conjunction with Section 27 of the Act

of 1962. Learned counsel maintains that the refund claims should

be processed since the customs duty was not properly payable

due to technical issues involving the non-integration of ICEGATE

with the Electronic Cash Ledger (ECL).

4.3 Learned counsel has drawn the Court's attention to Circular

No.09/2023-Customs dated 30.03.2023 issued by Central Board

of Indirect Taxes & Customs (for short 'CBIC'). The circular

initiated the phased implementation of ECL in Customs effective

from 01.04.2023, but due to certain technical glitches in the

functioning of ECL, which was being phased on a Common Portal,

the interest was provided to be waived off subject to the technical

issue having been resolved at the Common Portal.

4.4 Learned counsel further submits that the petitioner made

payments to the authorized Bank promptly after receiving the bill

of entry on 17.04.2023 and 19.04.2023. However, such payments

could not be completed due to technical glitches in the Common

Portal, and thus, the interest has been wrongly imposed and the

Import Duty to the extent of interest component was to be

refunded.

4.5 Learned counsel has taken this Court towards Annexure-8,

which clearly demonstrates that on 20.04.2023, two payment

entries were marked as successful in the concerned Bank's status

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record. However, the third party integration status for these

transactions is shown as failed.

4.6 Learned counsel has further referred to the order dated

21.11.2023, which, in accordance with the aforementioned

circular, confirmed the petitioner's eligibility for interest refund

with respect to the subject bill of entry.

4.7 Learned counsel has additionally drawn the Court's attention

to order dated 17.04.2023 (Annexure-7), issued by the concerned

Director, which noted that the technical difficulties to a large

extent had been substantially resolved by 13.04.2023.

4.8 Learned counsel further submits that the language of the

order clearly indicates that when the notification dated 17.04.2023

was issued regarding technical difficulties on the Common Portal

with authorized Banks, these technical issues had not been fully

resolved.

4.9 Learned counsel also submits that once the bill of entries

were returned, the necessary payments were made in accordance

with the aforementioned notifications read in conjunction with

Section 47 of the Act of 1962, and thus, the waiver of interest

ought to have been granted.

4.10 Learned counsel further submits that any difficulty in

processing the payment due to technical glitches on the part of

the respondents cannot be attributed to the petitioner for the

purpose of levying interest.

4.11 Learned counsel has highlighted from the order dated

17.04.2023 that the waiver contained in the order was to be given

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effect from the date when system inability at the Common Portal

was resolved, as certified by the Director General of Systems (for

short 'D.G. Systems') and the same shall also be governed by

Section 27 of the Act of 1962.

4.12 Learned counsel has then taken this Court to the advisory

issued by the D.G. System for operationalisation of the Customs

(Waiver of Interest) Third Order, 2023 dated 17.04.2023 and the

consequential regularization of electronic bill of entry in case of

manual Out of Charge (OOC) given in the wake of glitches in the

implementation of ECL facility since 01.04.2023 as issued by the

ICEGATE on 27.07.2023. The advisory read that for the purpose of

computing the date of removal of system inability, the ICEGATE

registered users whose wallets containing the released blocked

funds, the date would be deemed as the date of issue of this

Advisory which in this case is 27.07.2023. Thus, the D.G. Systems

which is the authority for operation of waiver contained in the

order dated 17.04.2023 as per Advisory has scheduled a date of

removal of system inability to be 27.07.2023.

4.13 Learned counsel, thus, submits that the impugned order is

contrary to law and the appropriate refund out to be granted to

the petitioner.

4.14 Learned counsel has relied upon the judgment rendered by

the Hon'ble Gujarat High Court in the case of Vishnu Aroma

Pouching Pvt. Ltd. v. Union of India reported in 2020 (38)

G.S.T.L. 289 (Guj.) on 14.11.2019. The relevant portion whereof

is reproduced hereunder:

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"12. From the facts as emerging from the record, it is manifest that despite the fact that the petitioner had approached them at the earliest point of time, the respondent authorities maintained silence for a considerable period of time and did not provide remedial measures till directed by this court. The errors in uploading the return were not on account of any fault on the part of the petitioner but on account of error in the system. In these circumstances, it would be unreasonable and inequitable on the part of the respondents to saddle the petitioner with interest on the amount of tax payable for August 2017, despite the fact that the petitioner had discharged its tax liability for such period well within time."

5. On the other hand, Mr. Rajvendra Sarswat, learned counsel

appearing on behalf of the respondents submits that the technical

glitches were substantially resolved to a large extent by

13.04.2023.

5.1 Learned counsel further submits that the Central Board of

Indirect Taxes and Customs was authorized to waive interest

payable under Section 47(2) of the Act of 1962 until the date

when the system inability was fully resolved.

5.2 Learned counsel contends that since the bill of entry, on

which, the duty payment for the specific bill of entry was initiated

after 13.04.2023 (on 20.04.2023), therefore, the order in

question will not help the petitioner.

5.3 Learned counsel further submits that the circular dated

17.04.2023 was only applicable for the interest payable under

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.

5.4 Learned counsel also submits that Section 47(2) of the Act of

1962, stipulates that once the bill of entry is returned and the

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payment has to be made within one day, as prescribed under

Section Section 47 of the Act of 1962.

6. Heard learned counsel for the parties at length as well as

perused the material available on record.

7. This Court finds that the petitioner being a Company and an

importer was seeking a refund claim under the Customs (Waiver

of Interest) Third Order, 2023, Order No.03/2023-Customs (NT)

dated 17.04.2023. The petitioner filed the bill of entry and then

deposited the import duty against the respective bill of entries,

which were returned on 19.04.2023, and initiated the payment

process within one day as evident by Annexure-8, which

demonstrates successful payment to the concerned Bank on

20.04.2023.

8. The 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.

9. This Court takes note of Section 47 of the Act of 1962, which

provides for the payment of import duty, which reads as follows:

"47. Clearance of goods for home consumption.--[(1)] Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption:

[Provided that such order may also be made electronically through the customs automated system system on the

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basis or risk evaluation through appropriate selection criteria:

Provided further that] the Central Government may, by notification in the Official Gazette, permit certain class of importers to make deferred payment of said duty or any charges in such manner as may be provided by rules.]

(2) The importer shall pay the import duty--

(a) on the date of presentation of the bill of entry in the case of self assessment; or

(b) within one day (excluding holidays) from the date on which the bill of entry is returned to him by the proper officer for payment of duty in the case of assessment, reassessment or provisional assessment; or

(c) in the case of deferred payment under the proviso to sub-section (1), from such due date as may be specified by rules made in this behalf, and if he fails to pay the duty within the time so specified, he shall pay interest on the duty not paid or short-paid till the date of its payment, at such rate, not less than ten per cent. but not exceeding thirty-six per cent. per annum, as may be fixed by the Central Government, by notification in the Official Gazette."

10. This Court has also seen Section 27 of the Act of 1962

whereby any person can claim refund of any duty or interest paid

by him. Section 27 of the Act of 1962 is reproduced hereunder:

"[27. Claim for refund of duty.--3[(1) Any person claiming refund of any duty or interest, --

(a) paid by him; or

(b) borne by him,

may make an application in such form and manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest:

Provided that where an application for refund has been made before the date on which the Finance Bill, 2011 receives the assent of the President, such application shall be deemed to have been made under sub-section (1), as it stood before the date on which the Finance Bill, 2011 receives the assent of the President and the same shall be dealt with in accordance with the provisions of sub-section (2):

Provided further that the limitation of one year shall not apply where any duty or interest has been paid under protest.

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[Provided also that where the amount of refund claimed is less than rupees one hundred, the same shall not be refunded.]

Explanation.--For the purposes of this sub-section, ―the date of payment of duty or interest in relation to a person, other than the importer, shall be construed as ―the date of purchase of goods by such person.

(1A) The application under sub-section (1) shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty or interest, in relation to which such refund is claimed was collected from, or paid by him and the incidence of such duty or interest, has not been passed on by him to any other person.

(1B) Save as otherwise provided in this section, the period of limitation of one year shall be computed in the following manner, namely:--

(a) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 25, the limitation of one year shall be computed from the date of issue of such order;

(b) where the duty becomes refundable as a consequence of any judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year shall be computed from the date of such judgment, decree, order or direction;

(c) where any duty is paid provisionally under section 18, the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof or in case of re-assessment, from the date of such re-

assessment.]

(2) If, on receipt of any such application, the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] is satisfied that the whole or any part of the [duty and interest, if any, paid on such duty] paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund:

Provided that the amount of [duty and interest, if any, paid on such duty] as determined by the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to --

(a) the [duty and interest, if any, paid on such duty] paid by the importer, [or the exporter, as the case may be] if he had not passed on the incidence of such 3[duty and interest, if any, paid on such duty] to any other person;

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(b) the 3[duty and interest, if any, paid on such duty] on imports made by an individual for his personal use;

(c) the 1[duty and interest, if any, paid on such duty] borne by the buyer, if he had not passed on the incidence of such 1[duty and interest, if any, paid on such duty] to any other person;

(d) the export duty as specified in section 26;

(e) drawback of duty payable under sections 74 and 75;

(f) the 1[duty and interest, if any, paid on such duty] borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify;

[(g) the duty paid in excess by the importer before an order permitting clearance of goods for home consumption is made where--

(i) such excess payment of duty is evident from the bill of entry in the case of self-assessed bill of entry; or

(ii) the duty actually payable is reflected in the reassessed bill of entry in the case of reassessment:]

Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of 1[duty and interest, if any, paid on such duty] has not been passed on by the persons concerned to any other person.

(3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal, 3[National Tax Tribunal] or any Court or in any other provision of this Act or the regulations made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2).

(4) Every notification under clause (f) of the first proviso to sub-section (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its re-assembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder.

(5) For the removal of doubts, it is hereby declared that any notification issued under clause (f) of the first proviso to sub-section (2), including any such notification approved or modified under sub-section (4), may be rescinded by the

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Central Government at any time by notification in the Official Gazette.]"

11. 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.

12. This Court observes that while issuing the order dated

17.04.2023, the authority itself was conscious of the fact that the

technical glitches admittedly were there, but removed to the large

extent by 13.04.2023, but the authority in its order itself

stipulated that the duty of the interest which has been paid shall

be open for waiver from the date of removal of such system

inability at the Common Portal as certified by the D.G. Systems.

Para 3 of the order dated 17.04.2023 at Page 78 (Annexure-7)

reads as follows:

"3. The waiver contained in this Order shall be given effect if the following conditions are fulfilled:

(a) the duty and interest has been paid within 3 days (including holidays) from the date of removal of such system inability at the Common Portal, which shall be certified by the DG Systems.

(b) the importer undertakes at the port of import to not pass on the incidence of such interest paid; and

(c) the provisions of section 27 of Customs Act 1962 shall govern the consequential refund of such interest paid."

13. This Court finds that the advisory issued by the D.G.

Systems which is the backbone of the determination of the date of

[2025:RJ-JD:7191-DB] (12 of 15) [CW-2899/2024]

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.

14. This Court has also perused the advisory issued on

27.07.2023 by the D.G. Systems, in which, the advisory for

operationalisation of the Customs (Waiver of Interest) Third

Order, 2023 dated 17.04.2023 and consequential regularization of

electronic bill of entry in the case of manual Out of Charge (OOC)

given in the wake of glitches in the implementation of ECL facility

since 01.04.2023 has been prescribed. The relevant part of the

advisory reads as follows:

"2. In order to operationalise the Customs (Waiver of Interest) Third Order, 2023 dated April 17, 2023 and to regularise such Bills of Entry in the System for which manual OOC was given, the Board i.e. CBIC has approved the following procedure:

(a) ..........

(b) ..........

(c) ..........

(d) ..........

(e) For the purpose of point (d) above, the 'Date of Removal of System Inability' would be taken as under:

(i) For the ICEGATE registered users whose wallets containing the released blocked funds were made accessible as on the date of this Advisory, 'Date of Removal of the System Inability' would be deemed as the date of issue of this Advisory;

For example, if the date of issue of this advisory is, say, July 27, 2023, then the user would have to pay duty along with interest by July 30, 2023. Failure to do so would make him ineligible for interest waiver by way of subsequent refund of the same in terms of the Customs (Waiver of Interest) Third Order, 2023 dated April 17, 2023.

(ii) For other ICEGATE registered users, if any, the 'Date of Removal of System Inability' would be the date on which the wallet containing the released blocked funds would be made available. Such users would be communicated through e-mail by ICEGATE HelpDesk about the removal of such System Inability.

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For example, if the date on which the wallet containing the released blocked funds were made accessible is say August 01, 2023, then the user would have to pay duty along with interest by August 04, 2023. Failure to do so would make him ineligible for interest waiver and subsequent refund of the same in terms of the Customs (Waiver of Interest) Third Order, 2023 dated April 17, 2023.

(iii) For the IEC's which are not yet registered at ICEGATE, the 'Date of Removal of the System Inability' would be the date on which such IECs get registered on ICEGATE and receive the communication from ICEGATE HelpDesk on the registered e-mail Id of the IEC user containing the credentials for logging into the ICEGATE portal."

15. The aforementioned 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.

16. This Court observes that provision of law under Section 47 of

the Act of 1962 clearly provides for payment of import duty by the

importer on the date of presentation of the bill of entry in case of

self assessment and within one day (excluding holidays) from the

date on which the bill of entry is returned to him by the proper

officer for payment of duty in the case of assessment,

reassessment or provisional assessment.

17. In this case, the petitioner has been able to demonstrate

that bill of entry had been returned on 19.04.2023 whereas within

24 hours, a genuine effort to make the necessary payments vide

Annexure-8 were made and in pursuance of bill of entries, the

necessary payments were forwarded to the concerned Bank,

which is reflected in Annexure-8.

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18. 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.

19. The judgment cited by learned counsel for the petitioner in

the case of Vishnu Aroma Pouching Pvt. Ltd. (supra)

establishes broad parameters for technical failure and holds that

no interest is demandable from the persons for delay in crediting

to the government account, particularly, when the delay is due to

technical glitches.

20. This Court is firmly of the opinion that the impugned order

dated 21.11.2023 suffers from inconsistency with conjoint reading

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of Section 47 and Section 27 of the 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.

21. In light of the foregoing discussion, the present petition is

allowed, and while quashing and setting the impugned order dated

21.11.2023, the respondents are directed to refund the amount in

question pertaining to the interest of the said period to the

petitioner within a period of three months from the date of receipt

of certified copy of this order. Stay petition stands disposed of.

(CHANDRA PRAKASH SHRIMALI),J (DR.PUSHPENDRA SINGH BHATI),J

102 Zeeshan

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