Specific tariff classification controls additional duty for textured yarn produced out of base yarn; higher rate refused.

For imported textured yarn produced out of base yarn, the additional duty under Section 3(1) of the Customs Tariff Act, 1975 had to be levied by reference to the specific description of the imported goods and the rate attached to that description. The highest-rate rule in the Explanation to Section 3(1) applies only where goods of the same description attract different rates. Because the goods were not "other textured yarn" but a distinct concessional category, the higher rate could not be used. The Additional Duty Rules, 1976 and the exemption notification were read consistently with that classification, and the levy remained confined to the specific rate.

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Issues: Whether, for imported textured yarn produced out of base yarn, the additional duty under Section 3 of the Customs Tariff Act, 1975 had to be levied at the specific rate applicable to that description in Notification No. 55/78 dated 1st March, 1978, or at the higher rate applicable to other textured yarn.

Analysis: The imported goods were found to fall within the category of textured yarn produced out of base yarn. Under Section 3(1) of the Customs Tariff Act, 1975, the additional duty is equal to the excise duty leviable on a like article, and where the imported article belongs to a particular class or description, the governing rate is the duty attached to that description. The Explanation to Section 3(1) applies the highest rate only where goods of exactly the same description attract different rates. Since the goods were not other textured yarn but textured yarn produced out of base yarn, the rate applicable to that specific description alone governed the levy. The Additional Duty Rules, 1976 and the exemption notification were read consistently with this classification.

Conclusion: The higher rate applicable to other textured yarn could not be applied. The additional duty was payable only at the rate specified for textured yarn produced out of base yarn, and the appellant succeeded.

Final Conclusion: The levy was confined to the specific concessional category corresponding to the description of the imported goods, and the refund claim was not liable to be defeated by reference to the higher rate for a different category.

Ratio Decidendi: For the purpose of additional duty under Section 3 of the Customs Tariff Act, 1975, the rate applicable is determined by the precise class or description to which the imported goods belong, and the highest-rate rule applies only when goods of the same description attract different rates.

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