Additional customs duty on Foley Balloon Catheters fails where the like article is fully exempt from excise duty.

Additional customs duty on imported Foley Balloon Catheters was not chargeable because Section 3 of the Customs Tariff Act, 1975 ties the levy to excise duty payable on a like article manufactured in India. The relevant excise notification granted full exemption to medical and surgical instruments, including suction catheters, and the product was treated as falling within that description. A later customs explanation excluding Foley Balloon Catheters did not affect liability under Section 3, since the decisive test was whether excise duty was leviable domestically on a like article. On that basis, the demand was set aside and the writ petition succeeded.

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Issues: Whether additional customs duty was payable on imported Foley Balloon Catheters, and whether the goods were exempt from such duty by reason of the customs and excise notifications governing suction catheters and allied medical equipment.

Analysis: Section 3 of the Customs Tariff Act, 1975 makes additional duty coextensive with the excise duty leviable on a like article manufactured in India, and the exemption structure under the customs and excise notifications had to be read together. The relevant excise notification granted full exemption to medical and surgical instruments including suction catheters, and the language of the excise list corresponded with the customs list earlier interpreted to include Foley Balloon Catheters as suction catheters. The later customs explanation excluding Foley Balloon Catheters did not alter the position under the excise notification for purposes of additional duty, because the taxable base under Section 3 depends on whether excise duty is leviable on a like article in India. The conclusion was reinforced by the consistent administrative treatment reflected in the connected import proceedings and the public notice placing the product within the import policy description.

Conclusion: Foley Balloon Catheters were not liable to additional customs duty, and the challenge to the demand succeeded.

Final Conclusion: The demand of additional customs duty was set aside and the writ petition was allowed.

Ratio Decidendi: Additional customs duty under Section 3 of the Customs Tariff Act, 1975 is payable only to the extent excise duty is leviable on a like article manufactured in India, and where the like article falls within a full excise exemption, additional customs duty cannot be imposed merely because the customs exemption has been withdrawn by a separate notification.

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