Case Note & Summary
The Supreme Court considered the leviability of additional duty under Section 3 of the Customs Tariff Act, 1975 on imported tyre cord grade woodpulp. The appellants, manufacturers of tyre yarn cord and fabric, imported tyre cord grade woodpulp from the United States of America and were called upon to pay additional duty. The appellants contended that the woodpulp was not produced or manufactured in India, and therefore additional duty must be calculated on the basis of the excise duty leviable on the class or description of articles to which the woodpulp belonged. They further argued that no tariff entry related to a like article and that residuary Entry 68, being a residuary entry relating to no class or description of goods, did not apply, with the result that no additional duty was leviable. The Assistant Collector rejected this contention, and the High Court of Rajasthan dismissed the appellants' writ petition. On appeal, the sole question before the Supreme Court was whether additional duty could be levied under Section 3(1) read with the Explanation when no like article was produced or manufactured in India. The Court examined Section 3(1), which imposes additional duty equal to the excise duty leviable on a like article if produced or manufactured in India, and its Explanation, which clarifies that if a like article is not so produced or manufactured, the excise duty that would be leviable on the class or description of articles to which the imported article belongs is to be applied. The Explanation further provides that where such duty is leviable at different rates, the highest duty applies. The Court held that the residuary Entry 68, which covers articles not elsewhere described, forms a class by themselves. Consequently, if a like article is not described in the Tariff, additional duty is leviable on the imported article based on the excise duty under Entry 68. The Court rejected the appellants' only contention, affirmed the lower authorities, and dismissed the appeal with no order as to costs. The decision confirms that the absence of a specific tariff entry for a like article does not preclude levy of additional duty; the residuary entry operates as the applicable class or description of articles.
Headnote
A) Customs Tariff - Additional Duty - Section 3(1) Customs Tariff Act, 1975 - Levy of Additional Duty equal to excise duty - Imported tyre cord grade woodpulp was not produced or manufactured in India; no specific tariff entry related to a like article; residuary Entry 68 covers articles not elsewhere described and forms a class by themselves - The Explanation to Section 3(1) provides that where a like article is not produced or manufactured in India, additional duty is leviable on the class or description of articles to which the imported article belongs - Held that additional duty is leviable on the imported woodpulp on the basis of excise duty under residuary Entry 68; appeal dismissed.
Issue of Consideration
Whether additional duty under Section 3(1) of the Customs Tariff Act is leviable on imported articles when no like article is produced or manufactured in India, and whether residuary Entry 68 can be applied as the class or description of articles to which the imported woodpulp belongs
Final Decision
Appeal dismissed. Additional duty leviable on imported tyre cord grade woodpulp under Section 3 of Customs Tariff Act, 1975 based on residuary Entry 68. No order as to costs.
Law Points
- Additional duty under Section 3 of Customs Tariff Act is leviable on imported articles based on excise duty leviable on like article if produced or manufactured in India
- if no like article is produced or manufactured in India
- additional duty is leviable on the class or description of articles to which the imported article belongs
- residuary Entry 68 covers articles not elsewhere described and forms a class by themselves
- absence of specific tariff entry does not preclude levy of additional duty
