A duplicate customs duty refund cannot be denied for a challan not generated due to system failure.

The appellant paid customs duty of ₹9,67,167 for Bill of Entry No. 4148551 on 21 July 2019, but the ICEGATE system did not generate a challan. It then made a second payment of ₹9,67,564, including one day’s interest, to secure clearance of the goods.

The appellant sought a refund of the first payment and submitted supporting records, including a bank-certified statement. The refund was rejected because the appellant could not produce challans for both payments; the Commissioner (Appeals) upheld that rejection. The appellant appealed to the Tribunal

Whether the appellant was entitled to a refund of the first duty payment when ICEGATE had not generated a challan

Whether refund could be denied for failure to produce both challans, and whether applicable interest was payable on the refund

The Tribunal applied Section 27 of the Customs Act, 1962, as the statutory procedure for refund, and Section 27A, under which interest is payable where a qualifying refund is not made within the prescribed period.

It also relied on JNCH Public Notice No. 62/2012 dated 19 November 2012, which treats double or multiple payments arising from payment-system issues as deposits capable of refund under Section 27. The Public Notice identifies supporting documents for a refund claim and assigns the relevant system and payment-status verification to the proper officer; it does not make production of two challans an indispensable requirement where one was never generated

The Tribunal found no dispute that the appellant had paid the duty twice for the same Bill of Entry. The appellant had submitted the documents recorded by the adjudicating authority, including the bank-certified statement showing both debits, and later furnished the bank’s confirmation that the first payment had not been reversed

Requiring the appellant to produce a challan that ICEGATE had failed to generate would impose an impossible condition and make the appellant bear the consequences of the Department’s system failure. Further, under the Public Notice, verification of payment and its status was for the Department’s officers, rather than a reason to reject the claim solely for want of both challans

The Tribunal held that interest would be governed by Section 27A and the applicable Government notifications if the refund was not made within the statutory period.

It directed the Department to refund ₹9,67,167, with applicable interest as per law, within two months of receiving the order