Additional customs duty on imported natural rubber was held unsustainable where the like domestic goods attracted nil excise duty.

Additional duty under section 3(1) of the Customs Tariff Act is limited to the excise duty leviable on a like article if manufactured in India; where the corresponding domestic goods carried nil excise duty because of exemption or non-leviability, the additional customs duty could not exceed nil, and the levy on imported natural rubber and smoked rubber sheets was held unsustainable. Refund of duty already paid was treated as governed by the prescribed statutory refund machinery under the customs and central excise laws, so direct writ-based refund relief was not granted and claimants were relegated to the competent refund process.

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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 and smoked rubber sheets when no excise duty was payable on the like goods if produced in India; (ii) Whether refund claims for duty already paid had to be pursued under the statutory refund provisions rather than by writ relief.

Issue (i): Whether additional duty under section 3(1) of the Customs Tariff Act, 1975 was leviable on imported natural rubber and smoked rubber sheets when no excise duty was payable on the like goods if produced in India.

Analysis: The duty under section 3(1) is measured by the excise duty leviable on a like article if produced or manufactured in India. The imported goods were natural rubber goods on which, during the relevant period, excise duty was not payable in view of the exemption and the statutory practice reflected by the notifications issued under the Central Excise law. On the statutory fiction adopted by section 3(1), the excise duty on the corresponding indigenous article was nil, and therefore the additional duty could not exceed nil.

Conclusion: The levy of additional duty on the imported natural rubber and smoked rubber sheets was illegal and unsustainable, and the writ petitioners succeeded on this issue.

Issue (ii): Whether refund claims for duty already paid had to be pursued under the statutory refund provisions rather than by writ relief.

Analysis: The refund of duty already collected was governed by the specific statutory procedure under the refund provisions of the customs and central excise enactments. Those provisions were applicable even to pending matters, and the existence of that remedy could not be ignored. At the same time, the long pendency of the writ proceedings and the practical hardship involved justified permitting the claimants to pursue refund before the competent authorities rather than requiring re-deposit of amounts already collected.

Conclusion: The refund-oriented writ petitions were not entertained as direct refund claims, and the parties were relegated to the statutory refund process with directions for consideration in accordance with law.

Final Conclusion: The decision invalidated the additional duty levy on the imported goods, but refund of amounts already paid was left to be worked out through the prescribed statutory machinery.

Ratio Decidendi: Under section 3(1) of the Customs Tariff Act, 1975, additional duty on an imported article is limited to the excise duty actually leviable on the corresponding like article in India, and where that excise duty is nil because of exemption or non-leviability, the additional duty is also nil; refund of duty already paid must ordinarily follow the statutory refund procedure.

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