Exemption from excise payment does not ish the levy; countervailing duty on imported goods remains chargeable.

An exemption notification that relieves payment of excise duty does not extinguish the underlying levy on manufacture. On that basis, countervailing duty under the Customs Tariff Act and additional duty of excise remained chargeable on imported goods even though like goods manufactured in India enjoyed partial or total exemption from excise duty. The analysis treated the exemption as affecting collection or payment only, not the existence of the duty itself. The challenge to the levy therefore failed, and the imposts were stated to be recoverable, with the importers not entitled to relief.

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Issues: Whether countervailing duty under the Customs Tariff Act and additional duty of excise could be levied on imported goods notwithstanding an exemption notification granting partial or total exemption from payment of excise duty on like goods manufactured in India.

Analysis: The scheme of levy and collection under Section 3 of the Customs Tariff Act, 1975 and Section 3(1) of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 was examined alongside Section 12 of the Customs Act, 1962, Section 37 of the Finance Act, 1978 and Rule 8 of the Central Excise Rules. The Court held that the charge of excise arises on manufacture, while an exemption notification affects only collection or payment and does not extinguish the levy. On that basis, the existence of a partial or total exemption from excise duty on indigenous goods did not prevent levy of countervailing duty or additional duty on imported goods. The reliance on the meaning of "duty of excise" was rejected, as the exemption notification did not negate the underlying charge.

Conclusion: The challenge to the levy failed and the imposts were held recoverable.

Final Conclusion: The importers were not entitled to relief, and the writ petition was dismissed with costs.

Ratio Decidendi: An exemption notification may relieve a manufacturer from payment of duty, but it does not remove the levy itself; therefore, countervailing duty and additional duty of excise remain chargeable where the underlying excise duty is otherwise leviable on like goods.

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