Pre-deposit waiver and stay granted where drawings and designs were already assessed to customs duty and R&D cess.

Imported drawings and designs, already declared for customs purposes and subjected to duty on the full consideration, were treated as an earlier assessed transaction rather than taxable design services. Payment of R&D cess also supported the view that the arrangement was treated as transfer of technical know-how, while the record showed disclosure to the authorities and no material suppression. On that basis, the demand appeared largely time-barred and the assessee established a strong prima facie case for interim protection. Unconditional waiver of pre-deposit was granted and recovery of the adjudged dues was stayed pending appeal.

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Issues: Whether unconditional waiver of pre-deposit and stay of recovery should be granted where the demand is founded on the same transaction that had already been assessed to customs duty and R&D cess, and where the assessee also raised a plea of limitation.

Analysis: The imported drawings and designs had been declared for customs purposes and duty had been discharged on the entire consideration, indicating that the transaction was already treated as supply of goods for customs purposes. The transaction was also regarded as transfer of technical know-how, with R&D cess having been paid, and the material did not support classification as taxable design services. The record further indicated disclosure of the transaction to the authorities at the relevant time, negating suppression, and the bulk of the demand appeared to be time-barred. These factors established a strong prima facie case for interim protection.

Conclusion: Unconditional waiver of pre-deposit was granted and recovery of the adjudged dues was stayed during pendency of the appeals.

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