Countervailing duty on imported aluminium rods turns on excise liability, not import tariff classification.

Imported aluminium rods were held liable to countervailing duty under Section 2-A of the Indian Tariff Act, 1934 because the decisive inquiry is whether the imported goods answer the description of a like article chargeable to excise duty in India. Their import tariff classification did not control the additional duty question. Although the rods fell under Item 70(1) for import purposes, they corresponded to aluminium under Item 27 of the Central Excises and Salt Act, 1944. The distinction between import tariff items was treated as irrelevant to the notional excise-based levy, so the countervailing duty was upheld and the challenge failed.

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Issues: Whether imported aluminium rods falling under Item 70(1) of the First Schedule to the Indian Tariff Act, 1934 were liable to additional duty by way of countervailing duty under Section 2-A of that Act on the footing that they corresponded to aluminium under Item 27 of the First Schedule to the Central Excises and Salt Act, 1944.

Analysis: Section 2-A of the Indian Tariff Act, 1934 makes imported articles liable to additional duty equal to the excise duty leviable on a like article if produced or manufactured in India. The relevant inquiry, therefore, is not whether the imported goods are classifiable under the same import tariff item as some other article, but whether the goods answer the description of an article chargeable to excise duty under the Excise Act. The imported aluminium rods, though treated for import tariff purposes under Item 70(1), fell within the general description of aluminium in Item 27 of the First Schedule to the Central Excises and Salt Act, 1944. The distinction between Item 66(1) and Item 70(1) in the import tariff was held to be irrelevant to the countervailing duty inquiry, because customs duty and excise duty operate in different spheres and the excise schedule alone governs the notional levy adopted for countervailing duty.

Conclusion: Countervailing duty was correctly levied and the challenge to the levy failed.

Ratio Decidendi: For countervailing duty under Section 2-A of the Indian Tariff Act, 1934, the decisive test is whether the imported article is liable to excise duty as a like article under the excise schedule; the import tariff classification does not control that inquiry.

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