Additional customs duty on imported rubber matches excise cess on domestic rubber under the Customs Tariff Act.

Additional duty of customs under Section 3 of the Customs Tariff Act, 1975 is co-extensive with the excise duty legally leviable on a like indigenous article, and is not limited to duty under the Central Excise Act alone. Where rubber produced in India bears duty of excise as cess under Section 12 of the Rubber Act, 1947, imported rubber attracts matching additional duty to maintain parity between domestic and imported goods. The mode of collection or appropriation of the cess does not alter its character as excise duty. The contrary view based on the 1997 communications was rejected as a misreading of those communications.

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Issues: Whether additional duty of customs under Section 3 of the Customs Tariff Act, 1975 was leviable on imported rubber to the extent equal to the duty of excise levied as cess under Section 12 of the Rubber Act, 1947 on rubber produced in India.

Analysis: Section 3 of the Customs Tariff Act levies additional duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. The expression is not confined to central excise duty alone, but extends to any excise duty leviable under a valid law on the like indigenous article. Section 12 of the Rubber Act levies a duty of excise as cess on rubber produced in India, and the mode of collection or subsequent appropriation does not alter its character as excise duty. The levy under Section 3 is intended to counter-balance the indigenous excise burden and maintain a level playing field for domestic manufacturers. The earlier contrary view based on the 1997 communications was found to proceed on a misreading of those communications, since they dealt with levy of cess on imports and not with the separate question of additional duty under Section 3.

Conclusion: Additional duty of customs was leviable on imported rubber under Section 3 of the Customs Tariff Act, 1975 to the extent equal to the cess levied as duty of excise under Section 12 of the Rubber Act, 1947. The contrary Tribunal view was overruled.

Ratio Decidendi: The additional duty under Section 3 of the Customs Tariff Act is co-extensive with the excise duty legally leviable on the like indigenous article under any applicable law, and not merely with duty under the Central Excise Act.

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