JUDGMENT :

[Vibhu Bakhru, J.]

1. The Revenue has filed the present appeal under Section 130 of the Customs Act, 1962 (hereafter the ‘Customs Act’) impugning an order dated 14.10.2020 – Final Order No.C/A/51573/2020-CU(DB), hereafter the ‘impugned order’ – passed by the Customs Excise & Service Tax Appellate Tribunal (hereafter the ‘Tribunal’) in Customs Appeal No.52739/2019.

2. The principal controversy involved in the present appeal is that, whether the respondent’s claim for refund of tax was beyond the period of limitation as prescribed under Section 27 of the Customs Act. Although the customs duty was reassessed by the Adjudicating Authority pursuant to the respondent prevailing before the Commissioner of Customs (Appeal); the benefit of reduction of duty was denied to the respondent on the ground that its application for refund was beyond the period of limitation. It is the Revenue’s case that since the duty was initially paid on the enhanced value without protest, the respondent’s claim for refund, which was made beyond the period of one year from the date of payment of duty, is barred by provisions of Section 27(1) of the Customs Act.

3. The respondent claims that it had paid the customs duty under protest and the same was evident from the fact that it had preferred an appeal challenging the enhancement of the value of the goods and consequentially the demand of additional custom duty. Thus, it is entitled to the benefit of second proviso to Section 27(1) of the Customs Act, which expressly provides that the limitation of one year, as prescribed under Section 27(1) of the Customs Act, would not apply when any duty or interest has been paid under protest.

4. The learned Tribunal following the decision of the Constitution Bench of the Supreme Court in the case of Mafatlal Industries Ltd. v. Union of India: 1997 (89) ELT 247 (SC) had accepted the respondent’s case that since it had filed an appeal challenging the levy of duty, the demand of duty was required to be considered as paid under protest.

5. The only question which falls for consideration for this Court is whether the learned Tribunal was correct in its finding that the duty paid by the respondent was required to be construed as duty paid under protest as the respondent had appealed against the enhancement of the value of the goods and the consequential enhancement in the custom duty payable thereon?

6. Briefly stated the relevant facts necessary to address the controversy in the present appeal are as under:

6.1 The respondent 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. The Special Valuation Branch conducted the relevant enquiries as to the arm’s length price of the goods imported by the respondent. 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.

6.2 Aggrieved by the Order-in-Original dated 25/26.08.2004, the respondent filed an appeal before the Commissioner of Customs (Appeals), which was allowed. The Commissioner of Customs (Appeals) set aside the Order-in-Original dated 25/26.08.2004 and remanded the matter to the Adjudicating Authority to assess the arm’s length of the imported goods after examining the relevant data submitted by the respondent.

6.3 Thereafter, the Adjudicating Authority assessed the value of the goods and by an order dated 23.04.2009 enhanced the declared value by 46% of the Global Price List for the relevant years 2004-07.

6.4 In view of the said order, the respondent filed an application on 12.04.2010 seeking refund of the excess duty paid for the period April, 2004 t