Additional customs duty on imported Cumene fails where the like Indian article is exempt from excise duty.

Imported Cumene was stated to be outside additional duty under Section 3 of the Customs Tariff Act, 1973 where the like article, if manufactured in India, was exempt from excise duty under a valid exemption notification and the exemption conditions were satisfied. The article explains that additional duty is linked to the excise duty leviable on a like indigenous article; if that article carries no excise burden because of exemption, the imported article cannot attract additional customs duty. On the stated facts, the consignment was entitled to clearance without payment of the additional duty, and the demand was set aside.

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Issues: Whether imported Cumene was liable to additional duty under Section 3 of the Customs Tariff Act, 1973 when the like article, if manufactured in India, was covered by an exemption notification issued under Rule 8 of the Central Excise Rules, 1944.

Analysis: The exemption notification dated 21 December 1967 exempted specified excisable goods, including chemicals, from excise duty when used in the refinery for manufacture of other goods or otherwise dealt with in the manner specified. The petitioners were found to be a refinery and to use Cumene in the manufacture of phenol and acetone. The Court followed the earlier binding view that additional duty under Section 3 is equal to the excise duty leviable on a like article produced or manufactured in India, and that if such like article is exempt from excise duty, no additional duty can be levied on the imported article. The conditions of the exemption were treated as satisfied on the facts.

Conclusion: The imported Cumene was not liable to additional duty, and the petitioners were entitled to clearance of the consignment without payment of such duty.

Final Conclusion: The writ petition succeeded, and the demand for additional customs duty on the imported Cumene was set aside.

Ratio Decidendi: Where a like article manufactured in India is exempt from excise duty under a valid exemption notification, additional duty under Section 3 of the Customs Tariff Act, 1973 cannot be levied on the imported article if the exemption conditions are satisfied.

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