Additional duty on brass scrap turns on excise liability of a like article and proof of exemption conditions under the notification.

Additional duty under Section 3 of the Customs Tariff Act is measured by the excise duty leviable on a like article manufactured in India; where the like article is wholly exempt, the additional duty may be nil. For brass scrap claimed under Notification No. 33/81, the unamended notification governed the import, and the later substitution could not be applied retrospectively. The importer nevertheless had to prove that the scrap arose from products outside Item 26A and from copper falling within Item 26A, so the duty question required fresh adjudication on evidence. Objections to transfer and maintainability were already concluded by the earlier majority view and were rejected.

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Issues: (i) Whether the imported brass scrap could be subjected to additional duty under Section 3 of the Customs Tariff Act, 1975 in the light of Notification No. 33/81 dated 01.03.1981. (ii) Whether the objections to transfer and maintainability of the proceedings before the Tribunal survived in view of the prior majority ruling.

Issue (i): Whether the imported brass scrap could be subjected to additional duty under Section 3 of the Customs Tariff Act, 1975 in the light of Notification No. 33/81 dated 01.03.1981.

Analysis: Additional duty under Section 3 is equal to the excise duty leviable on a like article produced or manufactured in India. If the like article is wholly exempt from excise duty, the additional duty becomes nil. The unamended item (b) of Notification No. 33/81 was held to govern the relevant import, and the later substitution introduced a new requirement of manufacture in India which could not be applied retrospectively. The importer nevertheless had to establish, by evidence, that the scrap arose from products not falling under Item 26A and that those products were manufactured from copper falling under Item 26A. The lower authorities had not examined those conditions.

Conclusion: The exemption could apply only if the prescribed conditions were proved, and the matter required fresh adjudication on that evidence.

Issue (ii): Whether the objections to transfer and maintainability of the proceedings before the Tribunal survived in view of the prior majority ruling.

Analysis: The prior majority had already held that there was a valid proceeding pending before the Central Government on the relevant date, that it stood transferred to the Tribunal, and that the time-limit objection under the erstwhile provision did not apply to proceedings under sub-section (4). Those objections were therefore concluded.

Conclusion: The maintainability objections were rejected as concluded by the earlier majority view.

Final Conclusion: The duty question was not finally decided against the importer on merits and was sent back for fresh decision after giving an opportunity to adduce evidence, while the preliminary transfer and limitation objections stood overruled.

Ratio Decidendi: For additional duty under Section 3 of the Customs Tariff Act, 1975, the decisive test is the excise duty actually leviable on a like article in India, and where exemption is claimed under a notification, the importer must prove satisfaction of the notification's conditions before the duty can be treated as nil.

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