Additional customs duty on imported coal was denied because washing coal does not amount to manufacture under the Customs Tariff framework.

Imported low ash coking coal was held not liable to additional customs duty under section 3 of the Customs Tariff Act, 1975 because the duty is linked to excise duty on a like article produced or manufactured in India, and coal is not manufactured in that sense but merely raised from the ground. The SC noted that the Coal Mines (Conservation and Development) Act, 1974 distinguishes between coal raised and coke manufactured, reinforcing that coal is not treated as a manufactured product. Washing coal to reduce ash content did not amount to manufacture of a new article, and the absence of a notification under section 7 of the 1974 Act did not change the result. The issue was decided in favour of the assessee.

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Issues: Whether imported low ash coking coal was liable to additional customs duty under section 3 of the Customs Tariff Act, 1975.

Analysis: Additional customs duty under section 3 is linked to the excise duty leviable on a like article if produced or manufactured in India. Coal is not an article produced or manufactured in the relevant sense; it is only raised from the ground. The Coal Mines (Conservation and Development) Act, 1974 uses different language for coal and coke, levying duty on coal raised and dispatched and on coke manufactured and dispatched, which confirms that coal is not treated as a manufactured product. Washing coal to reduce ash content does not amount to manufacture of a new article. The absence of a notification under section 7 of the Coal Mines (Conservation and Development) Act, 1974 also did not alter the position.

Conclusion: The imported coal was not liable to additional customs duty under section 3 of the Customs Tariff Act, 1975; the issue was decided in favour of the assessee.

Ratio Decidendi: Additional customs duty under section 3 of the Customs Tariff Act, 1975 is not leviable where the imported article is not producible or manufacturable in India as the like article, and mere processing such as washing does not amount to manufacture.

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