Special Additional Duty on imports upheld where exemption was withdrawn, prior payment was absent, and VAT exemption did not defeat the levy.

Special Additional Duty of Customs on imported silk fabrics was held payable because the import occurred after the exemption was withdrawn, and the importer had not paid the duty at the time of import. Refund under the relevant notification was unavailable where prior payment of the duty was absent, so the claim based on non-payment failed. The plea of provisional assessment was also rejected because the dispute regarding countervailing duty did not affect liability to Special Additional Duty. The asserted State VAT exemption did not displace the central levy on goods sold in India, and the demand was upheld.

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Issues: Whether the demand of Special Additional Duty of Customs on the imported silk fabrics was sustainable, including the effect of the claimed VAT exemption and the plea of provisional assessment.

Analysis: The import had taken place after the change in law withdrawing the exemption from Special Additional Duty, and the importer had not paid the duty at the time of import. Refund of Special Additional Duty under the refund notification is conditional upon prior payment of the duty, so a claim based on non-payment could not be sustained. The plea based on provisional assessment was rejected because the dispute relating to countervailing duty had no bearing on liability to Special Additional Duty. The claimed exemption under a State VAT regime did not negate the central levy for goods sold in India.

Conclusion: The demand of Special Additional Duty was upheld and the challenge to the impugned order failed.

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