Countervailing duty and tariff classification: statutory definition governs levy, even without local manufacture, while reclassification must be proved.

Countervailing duty under section 2A of the Indian Tariff Act was treated as an import duty measured by the excise duty leviable on a like article, and the statutory Explanation extended the levy even where no like article was actually manufactured in India. The commentary also notes that, absent a rule requiring it, a revisional authority is not bound to grant personal hearing in every case. On tariff classification, the importer had an opportunity to show entitlement to a lower rate, but no affidavit was filed to displace the Revenue's stand on the goods' character, so no basis for reclassification was established.

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Issues: (i) Whether countervailing duty under section 2A of the Indian Tariff Act, 1934 was leviable only if a like article was actually manufactured or produced in India; (ii) whether the revisional order was invalid for want of personal hearing; and (iii) whether the petitioner was denied a fair opportunity to show that the imported goods fell under a different excise tariff item attracting a lower rate of duty.

Issue (i): Whether countervailing duty under section 2A of the Indian Tariff Act, 1934 was leviable only if a like article was actually manufactured or produced in India.

Analysis: Section 2A imposed an additional customs duty on imported articles equal to the excise duty for the time being leviable on a like article, and its Explanation expressly defined that expression to include the duty that would be leviable even where a like article was not in fact produced or manufactured in India. The levy was therefore an import duty measured by reference to excise duty, and the statutory definition displaced any general meaning of countervailing duty drawn from other contexts.

Conclusion: The contention was rejected and the levy was held valid even where no like article was manufactured in India.

Issue (ii): Whether the revisional order was invalid for want of personal hearing.

Analysis: No rule or authority was shown to establish that a revisional authority is bound to grant a personal hearing in every case. In the absence of such a legal requirement, failure to afford personal hearing did not by itself render the revisional order void or illegal.

Conclusion: The objection failed and the revisional order was upheld on this ground.

Issue (iii): Whether the petitioner was denied a fair opportunity to show that the imported goods fell under a different excise tariff item attracting a lower rate of duty.

Analysis: The import duty classification was not disputed, but the petitioner was given an opportunity to place an affidavit showing that the goods were of cellulosic origin or otherwise fell under a different item. No affidavit was filed to controvert the Revenue's stand that the goods were non-cellulosic staple fibre. In that situation, the basis for reclassification was not established.

Conclusion: The claim for a lower tariff rate was not made out.

Final Conclusion: The challenge to the countervailing duty levy and the revisional order failed, and no ground was established for interfering with the assessment or classification of the imported goods.

Ratio Decidendi: Where a statute expressly defines countervailing duty for imported goods, that definition governs the levy and the duty remains chargeable even if a like article is not actually manufactured in India.

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