Additional customs duty on imported rubber can proceed under an independent charging provision despite earlier cess rulings.

The Madras HC held that earlier rulings barring levy of cess under the Rubber Act on imported rubber did not prevent the revenue from issuing a show cause notice for additional duty under the independent charging provision in Section 3(1) of the Customs Tariff Act, 1975. It further held that the levy under Section 12(1) of the Rubber Act, treated as a duty of excise on rubber produced in India, could be used as the measure for computing additional duty on imported natural rubber. The writ challenge to the proposed levy therefore failed, and the notice was upheld.

---

---

Issues: (i) Whether the revenue could issue a show cause notice proposing additional duty of customs under Section 3(1) of the Customs Tariff Act, 1975 in respect of imported natural rubber, despite earlier litigation concerning levy of cess under the Rubber Act, 1947; (ii) Whether the levy under Section 12(1) of the Rubber Act, 1947 could be treated as excise duty for the purpose of computing additional duty under Section 3(1) of the Customs Tariff Act, 1975.

Issue (i): Whether the revenue could issue a show cause notice proposing additional duty of customs under Section 3(1) of the Customs Tariff Act, 1975 in respect of imported natural rubber, despite earlier litigation concerning levy of cess under the Rubber Act, 1947.

Analysis: The earlier proceedings before the Tribunal and the Supreme Court had concluded only that cess under the Rubber Act could not be levied by the Customs Department on imported rubber. The Court held that those decisions did not determine the separate question whether additional duty of customs, being a charge under Section 3(1) of the Customs Tariff Act, 1975, could be invoked on the imported goods. Since Section 3(1) is an independent charging provision, the existence of earlier litigation on cess did not destroy the revenue's jurisdiction to initiate proceedings for additional duty.

Conclusion: The show cause notice was within jurisdiction and could not be quashed on the ground that the issue had already been concluded in favour of the assessee.

Issue (ii): Whether the levy under Section 12(1) of the Rubber Act, 1947 could be treated as excise duty for the purpose of computing additional duty under Section 3(1) of the Customs Tariff Act, 1975.

Analysis: The Court relied on the settled position that Section 3(1) of the Customs Tariff Act, 1975 levies additional duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. It also relied on the judicial understanding of Section 12(1) of the Rubber Act, 1947 as levying a duty of excise in the form of cess on rubber produced in India. On that basis, the levy on indigenous rubber supplied the measure for the additional duty on imported rubber, and the imported article did not escape the charge merely because no cess was directly leviable on imports under the Rubber Act.

Conclusion: The levy under the Rubber Act could be used as the measure for additional duty, and the petitioner's challenge to the proposed levy failed.

Final Conclusion: The writ petitions were not maintainable on the petitioner's jurisdictional challenge, because the revenue was entitled to proceed under the customs tariff charging provision notwithstanding the earlier rulings on cess, and the impugned notice was upheld.

Ratio Decidendi: Where an earlier decision only excludes levy of cess under the Rubber Act on imported goods, it does not preclude the Customs Department from invoking the independent charging provision for additional duty under Section 3(1) of the Customs Tariff Act, 1975, using the excise-duty incidence on the like indigenous article as the measure of levy.

---