TMI Blog2017 (10) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... t produced or manufactured in India, the duty levied within the meaning of subsection (1) of section 3 would mean the duty which would be leviable on the class or description of the articles to which the imported article belongs. The levy under subsection (1) of section 3 is permissible, provided the imported article is liable to excise duty if manufactured in India. If goods of class A are imported and if excise duty is not payable on the goods manufactured in India of that class, there is no question of levy of additional duty under subsection (1) of section 3 - it is not disputed that exemption notification dated 1st March 1984 will apply to the transformer oil imported by the first petitioner. The provision of section 3 is basically enacted to safeguard the interests of the manufactures in India. In fact, the provision for levy of additional duty on the imported articles is to counterbalance the excise duty leviable on like articles made indigenously. As the additional duty is to counterbalance and to safeguard the interests of the manufactures in India, if the manufactures in India are not liable to pay duty on the goods of the like category, then on import of such goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olumn4 of the table. 3. The submission is that the transformer oil has been exempted under the said notification and, therefore, the additional duty under subsection (1) of section 3 of the said Act of 1975 is not payable. The petitioners made a representation dated 30th November 1989 to the Collector of Customs, Mumbai in which it is stated that in view of interim order dated 22nd December 1988 passed in Writ Petition No.3806/1988, the goods be cleared subject to first petitioner furnishing bank guarantee of 50% of the differential duty and bond for the balance amount. 4. The prayer in this petition under Article 226 of the Constitution of India is for quashing and setting aside the order of assessment at Exh.C to the extent to which the additional duty is made payable under subsection (1) of section 3 of the said Act of 1975. 5. There is an affidavitinreply filed by Shri A.M.Sahay, Deputy Collector of Customs. It is contended in the said affidavit that the first petitioner is not entitled to seek benefits of notification dated 1st March 1984 as the first petitioner is not involved in manufacture of transformer oil. It is contended that the first petitioner can have the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may be; and (ii) any duty of customs chargeable on that article under Section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, [but not including that duty referred to in subsection (1). (3) If the Central Government is satisfied that it is necessary in the public interest to levy on any imported article [whether on such article duty is leviable under subsection (1) or not] such additional duty as would counterbalance the excise duty leviable on any raw materials, components and ingredients of the same nature as, or similar to those, used in the production or manufacture of such article, it may, by notification in the Official Gazette, direct that such imported article shall, in addition, be liable to an additional duty representing such portion of the excise duty leviable on such raw materials, components and ingredients as, in either case, may be determined by rules made by the Central Government in this behalf. (4) In making any rules for the purposes of subsection (3), the Central Government shall have regard to the avera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation provides in so many words that the expression excise duty for the time being leviable on a like article if produced or manufactured in India means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India (emphasis supplied). The Explanation even goes further and provides that if a like article is not so produced or manufactured, then, the duty leviable means the duty which would be leviable on the class or description of articles to which the imported article belongs. These provisions leave no doubt that the duty referred to in Section 3(1) of the Tariff Act does not bear any nexus which the nature and quality of the goods imported into India. (underlines added) What is important is that the Apex Court has held that subsection (1) of section 3 of the said Act of 1975 does not require that the imported article should be such which is capable of being produced or manufactured in India. The assumption has to be that the article imported into India can be manufactured in India and upon that basis, the duty has to be determined under subsection (1) of section 3 of the said Act of 1975. If like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellants but, in the absence of any ambiguity in the wording of Section 3(1), we cannot treat the additional duty referred to therein as countervailing duty. Nor, indeed, can we regard that provision as a charging section merely because the Statement says that Section 3 provides for the levy . The Statement of Objects and Reasons errs in being common to Subsections (1) and (3) of Section 3. It is more apposite to subsection (3) though, even there, it may not be correct to say that it is a charging provision. Subsection (3) confers power on the Central Government, in public interest, to levy on any imported article such additional duty as would counterbalance the excise duty leviable on any raw materials, components and ingredients of the same nature as, or similar to those, used in the production or manufacture of such article , whether on such article, duty is leviable under subsection (1) or not. Since we are not concerned directly with subsection (3), we will not pronounce upon its meaning and implications. 12. The provision of section 3 is basically enacted to safeguard the interests of the manufactures in India. In fact, the provision for levy of additional duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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