Countervailing duty on imported lubricating oils applies by reference to the domestic taxable class, not identical manufacture alone.

Countervailing duty under Section 2A of the Indian Tariff Act, 1934 was held payable on imported lubricating oils by reference to the class or description of lubricating oils liable to excise duty in India. The statutory fiction in the explanation applied where identical goods were not manufactured domestically, so the duty could be determined by the taxable class to which the imported goods belonged; where different rates applied, the highest rate would govern. Because Item 11-A covered lubricating oils as a class, the fact that only some grades were manufactured in India did not exclude the imported oils from duty, and the challenge to refund was rejected.

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Issues: Whether countervailing duty under Section 2A of the Indian Tariff Act, 1934 could be levied on imported lubricating oils when identical oils were not manufactured in India, but lubricating oils belonging to the same class were manufactured in India.

Analysis: Section 2A levies customs duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. The explanation extends the provision by legal fiction to cases where a like article is not actually produced or manufactured in India, in which event the duty is referable to the class or description of articles to which the imported article belongs, and where different rates apply, the highest duty. The entry relating to lubricating oils in Item 11-A of the First Schedule to the Central Excises and Salt Act, 1944 covered lubricating oils as a class, and the fact that only certain grades were manufactured in India did not exclude the imported oils from the taxable entry.

Conclusion: The levy of countervailing duty on the imported lubricating oils was valid and the challenge to the refusal of refund failed.

Final Conclusion: The petition was rejected because the statutory scheme authorised countervailing duty on imported lubricating oils by reference to the class of lubricating oils liable to excise duty in India.

Ratio Decidendi: Countervailing duty is chargeable on imported goods by reference to the class or description of goods liable to excise duty in India, even where identical goods are not manufactured in India, if the statutory entry covers that class of goods.

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