Nil excise duty on a like article means no additional customs duty on vessels imported for breaking up.

Imported vessels for breaking up attracted no additional customs duty where the corresponding article under Heading 89.08 of the Central Excise Tariff carried nil excise duty by virtue of a valid exemption notification. Applying Section 3 of the Customs Tariff Act, 1975, the Court reasoned that additional duty is linked to the excise duty leviable on a like article produced in India; if that excise duty is nil, the corresponding additional duty must also be nil. The assessment was therefore set aside to the extent it demanded additional customs duty, and liability was confined to the duty payable under the applicable customs notification.

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Issues: Whether additional customs duty was leviable on a vessel imported for breaking up when the corresponding article under the excise tariff attracted nil duty by virtue of the exemption notification.

Analysis: The Court relied on the exemption granted by Notification No. 167/86-C.E. for goods falling under Chapter 89 of the Central Excise Tariff Act, 1985, read with Rule 8(1) of the Central Excise Rules, 1944. Tariff Heading 89.08 covered vessels for breaking up, and the language of the excise and customs tariff headings was identical. Under Section 3 of the Customs Tariff Act, 1975, additional duty is levied at a rate equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. Since the excise duty on the relevant tariff item was nil, the corresponding additional duty on the imported vessel had to be nil as well.

Conclusion: Additional duty was not leviable beyond the duty payable on the basis of Notification No. 74/93-Cus., and the assessment imposing additional customs duty was set aside.

Final Conclusion: The writ petition succeeded and the assessment was quashed to the extent of the additional duty demand, leaving the petitioners liable only to the duty worked out under the applicable customs notification.

Ratio Decidendi: Where the excise duty on a like article is nil by reason of a valid exemption, the additional duty under Section 3 of the Customs Tariff Act, 1975 must also be nil.

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