The Division Bench of Delhi High court has granted relief to CISCO Systems directing to refund duty paid on enhanced value of the goods under protest.
The respondent CISCO Systems India Pvt Ltd had imported certain goods from its parent company located overseas during the period April, 2004 to June, 2008. Since the import was from a related party, the Revenue initiated an investigation as to whether the declared value of the goods imported was at an arm’s length price. Thereafter, the Adjudicating Authority passed an Order-in-Original dated 25/26.08.2004 enhancing the declared value of the goods by 65.75% in case of spare parts; 45% for imports made for STP Units; and, 26% for import of goods for demonstration purposes and for internal use by the respondent.
Adjudicating Authority, enhanced the declared value by 46% of the Global Price List for the relevant years 2004-07. In view of the said order, the respondent filed an application seeking refund of the excess duty paid. The said application was rejected on the ground that the respondent’s claim was barred by limitation but was allowed by the tribunal.
The only issue addressed here was whether filing of an appeal against the Order-in-Original dated 25/26.08.2004 while at the same time paying the duty on the enhanced value, would amount to paying the same under protest.
An appeal had been filed by the revenue.
Karan Sachdev, on behalf of the assessee submitted that the additional duty was paid under protest as the respondent had appealed the Order-in Original dated 25/26.08.2004 enhancing the declared value of the goods resulting in the increase in custom duty.
Satish Kumar, on behalf of the revenue submitted that no formal protest had been lodged while paying the duty, the benefit of second provision to Section 27(1) of the Customs Act would not be available to the respondent.
Justice Vibhu Bakhru and Justice Amit Mahajan dismissed the appeal observing that,
“It is difficult for this Court to accept that the payment of custom duty imposed pursuant to an order while appealing the same can be construed as payment of duty without protest. The very act of filing an appeal against an order imposing customs duty is a protest against the duty as assessed. The entire purpose of such an appeal is to seek reduction of the levy. It is, thus, obvious that the assessee does not accept the said levy and payment of the same would necessarily have to be construed as payment under protest.”
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