Additional customs duty depends on excise duty on like goods; basic customs exemption alone does not extend to it.

Additional duty under Section 3(1) of the Customs Tariff Act is chargeable only where an excise duty is actually in force and leviable on a like article produced or manufactured in India. On the facts discussed, natural rubber was treated as not involving manufacture, and the excise-law exemption position showed that no corresponding excise duty was leviable for the relevant period, so the additional duty failed for want of a statutory measure. A separate exemption from basic customs duty under Section 25(2) of the Customs Act does not, by itself, extend to additional duty under Section 3(1) unless the notification expressly covers that levy. The refund and restraint relief followed from the absence of excise duty and the specific exemption applicable on the facts.

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Issues: (i) Whether additional duty under Section 3(1) of the Customs Tariff Act, 1975 was leviable on imported natural rubber when no excise duty was in force or leviable on like goods in India, having regard to the absence of manufacture and the exemption position under the excise law; (ii) Whether exemption of basic customs duty under Section 25(2) of the Customs Act, 1962 carried with it exemption from additional duty under Section 3(1) of the Customs Tariff Act, 1975.

Issue (i): Whether additional duty under Section 3(1) of the Customs Tariff Act, 1975 was leviable on imported natural rubber when no excise duty was in force or leviable on like goods in India, having regard to the absence of manufacture and the exemption position under the excise law.

Analysis: Section 3(1) makes the imported article liable only to a duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. The Explanation shows that the measure of additional duty is the excise duty actually in force and leviable on the corresponding Indian article. Natural rubber was accepted as not involving any manufacturing process, and there was no rebuttal to that position. The residuary excise item could not be invoked to create a levy where the goods were not shown to be excisable in the relevant sense. The exemption notifications under the excise law and the notification under Section 11C further reinforced that no excise duty was in force and leviable on the goods during the relevant period. In that situation, the statutory measure for additional duty was absent.

Conclusion: Additional duty was not leviable on the imported natural rubber, and the petitioners succeeded on this issue.

Issue (ii): Whether exemption of basic customs duty under Section 25(2) of the Customs Act, 1962 carried with it exemption from additional duty under Section 3(1) of the Customs Tariff Act, 1975.

Analysis: The customs exemption notification did not in terms extend to additional duty under the Customs Tariff Act, and nothing could be implied into it beyond its express language. A separate exemption from basic customs duty did not, by itself, displace the liability created by Section 3(1) unless the notification clearly covered that levy. On the facts, however, the decisive relief followed from the absence of excise duty and the specific exemption relating to the quantity covered by notification.

Conclusion: The customs exemption did not, by itself, exempt additional duty; this issue was answered against the petitioners in principle, though the overall relief remained in their favour on the other grounds.

Final Conclusion: The writ petitions were allowed, additional duty already collected was directed to be refunded where applicable, and further levy and collection were restrained in the relevant cases.

Ratio Decidendi: Additional duty under Section 3(1) of the Customs Tariff Act, 1975 can be imposed only where an excise duty is actually in force and leviable on a like article produced or manufactured in India; if no such excise duty exists for the relevant period, the additional duty fails for want of the statutory measure.

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