Countervailing duty on imported acrylic sheets depends on excise liability of like Indian goods and cannot rest on theoretical manufacture possibilities.

Additional duty under Section 2-A(1) of the Indian Tariff Act, 1934 arises only where a like article, if manufactured in India, is liable to excise duty. Where Indian-made acrylic sheets were fully exempt under the applicable exemption notification, subject to the specified source-material conditions, the same goods imported from abroad could not attract countervailing duty on a mere theoretical possibility of manufacture from other materials. On the stated facts, the imported acrylic sheets were shown to be made from methyl methacrylate monomer, and that factual position was not disputed. The Collector's approach was therefore misconceived, and countervailing duty was not leviable.

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Issues: Whether countervailing duty was leviable on imported acrylic sheets when the corresponding acrylic sheets manufactured in India were covered by an exemption notification and the imported goods were shown to be made from methyl methacrylate monomer.

Analysis: Liability to additional duty under Section 2-A(1) of the Indian Tariff Act, 1934 arises only where an excise duty is leviable on a like article if produced or manufactured in India. The exemption notification granted complete exemption to acrylic sheets manufactured in India, subject to specified source-material conditions. The imported acrylic sheets were established on the record to have been manufactured from methyl methacrylate monomer, and that factual position was neither denied nor found otherwise by the Department. In that situation, the Collector's approach, which treated the existence of a theoretical possibility of manufacture from other materials as sufficient to attract countervailing duty, was misconceived.

Conclusion: Countervailing duty was not leviable on the imported acrylic sheets, and the levy and the Collector's order were set aside.

Ratio Decidendi: Additional duty under Section 2-A(1) is attracted only when the like article, if manufactured in India, is liable to excise duty; where the like Indian article is fully exempt under the applicable notification on the established facts, no countervailing duty can be levied on the import.

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