CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH, COURT NO. 1 CUSTOMS APPEAL NO. 51592 OF 2022 [Arising out of Order in Appeal No. CC(A) CUS/D-I/GEN/3972/2021-22 dated 24.01.2022 passed by the Commissioner (Appeals), New Delhi]

M/S CADENCE DESIGN SYSTEMS INDIA PVT ….APPELLANT LTD Plot No. 57A & B, Noida Special Economic Zone Vs.

COMMISSIONER, CUSTOMS-NEW DELHI ….RESPONDENT New Customs House, Near IGI Airport, New Delhi 110037 Appearance:

Shri Deepak Thakur, Shri Rishab Mishra and Ms. Akansha Wadhwani, Advocates for the Appellant Shri Girijesh Kumar, Authorised Representative for the Respondent CORAM:

HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON'BLE MR. P. V. SUBBA RAO, MEMBER ( TECHNICAL )

FINAL ORDER NO. 50806 /2026 DATE OF HEARING : 09/03/2026 DATE OF DECISION: 28/04/2026 P.V.SUBBA RAO

1. M/s Cadence Designs Systems India Pvt. Ltd.¹ filed this appeal to assail the order dated 24.01.2022 passed by the Commissioner of Customs (Appeals) in which he upheld the order of the Assistant Commissioner dated 19.05.2017 and rejected the appellant’s appeal.

1 Appellant

2. The appellant is a fully owed subsidiary of M/s Cadence Design Systems, USA² and is a Software Technology Park of India³unit. It acts as the back office and provides support services to Cadence, USA.

3. In March 2006, the appellant had imported computer system called “Palladium system” from Cadence, USA. As the imports were made by the appellant from its parent company, the matter was referred to the Special Valuation Branch⁴ of the Customs House to determine the value. It must be pointed out that as a unit located in STPI, the appellant was not liable to pay any duty at all unless the imported goods were taken out of the STPI. The determination of the value by the SVB was, therefore, more of an academic interest. On 06.01.2014, the Assistant Commissioner passed the order rejecting the transaction value of the appellant as the assessable value.

4. Aggrieved, the appellant filed an appeal before the Commissioner (Appeals). By order dated 28.04.2015, the Commissioner (Appeals) remanded the matter to the Assistant Commissioner. On 09.05.2017 the Assistant Commissioner passed an order in the de novo proceedings which the appellant assailed before the Commissioner (Appeals). The Commissioner (Appeals) upheld the order of the Assistant Commissioner and, therefore, the appellant filed an appeal before this Tribunal. By order dated 23.03.2021, this Tribunal remanded the matter to

2 Cadence USA

3 STPI

4 SVB

the Commissioner (Appeals) for de novo adjudication. The Commissioner (Appeals), thereafter, passed the impugned order upholding the order of the Assistant Commissioner. Aggrieved, the appellant filed this appeal.

5. At the outset, we may point out that this entire litigation is largely for academic purposes as, according to the learned counsel for the appellant, the appellant is an STPI unit and, therefore, was not required to pay duty at all regardless of what value is determined by the officers.

Submissions of the appellant

6. Learned counsel for the appellant asserted that the impugned order wrongly upheld the loading of 14.24 % of the invoice value to determine the assessable value on the ground that the Cadence USA and the appellant were related as per rule 2(ii)(v) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007⁵ and submitted as follows:

(i) The department failed to show “mutuality of interest” and, therefore, the transaction value of the goods imported in 2006 cannot be rejected.

(ii) The Palladium system was imported before 2007 and as per section 14(1) of the Customs Act, 1962⁶ as applicable during the relevant period the value for the purpose of Customs Act was the

5 Valuation Rules

6 Act value of such goods which are ordinarily sold or offered for sale for delivery at the time and place of importation or export, as the case may be, in the course of international trade where the seller and buyer have no interest in business o