Exemption conditions for polyvinyl alcohol and additional customs duty depend on strict compliance with the notification's duty-paid input requirement.

Imported polyvinyl alcohol qualified for the concessional rate only if it was manufactured from vinyl acetate monomer on which the relevant excise duty or additional customs duty had been paid, and that condition was treated as operative rather than redundant. The imported goods could not satisfy that requirement because the monomer used in their manufacture could not have borne Indian duty. The article also distinguishes levy from exemption under the Customs Tariff Act: additional duty is the duty for the time being leviable on a like article produced in India, not necessarily the exempted concessional rate under the notification. Accordingly, the exemption was unavailable and the additional duty was not confined to 10% ad valorem.

---

---

Issues: Whether imported polyvinyl alcohol was entitled to the concessional rate under Notification No. 185/83-C.E. and, consequently, whether the additional duty of customs under Section 3 of the Customs Tariff Act, 1975 was confined to 10% ad valorem.

Analysis: The notification granted exemption only where polyvinyl alcohol was manufactured from vinyl acetate monomer on which the appropriate excise duty or additional customs duty had been paid. The condition was held to be an operative condition, not a redundant one, and could not be ignored on the footing that indigenous manufacture ordinarily used duty-paid monomer. The imported goods could not satisfy the condition because the monomer used in their manufacture could not have borne Indian excise duty or additional duty. The construction urged by the respondents, that the additional duty must always mirror the concessional 10% rate applicable under the notification, was rejected because the rate under Section 3 of the Customs Tariff Act is the duty for the time being leviable on a like article produced or manufactured in India, and that leviable duty is not necessarily the exempted concessional rate. The distinction between levy and exemption was maintained.

Conclusion: The imported consignments were not entitled to the benefit of Notification No. 185/83-C.E., and the additional duty of customs was not confined to 10% ad valorem. The issue was decided in favour of the Revenue.

Ratio Decidendi: An exemption notification must be applied according to its plain terms, and an imported article cannot claim the concessional customs additional duty where the statutory conditions of the exemption applicable to the like indigenous article are not satisfied.

---