Additional customs duty on imported textile machinery can follow the excise-equivalent cess rate under the Textile Committee law.

Imported textile machinery was held liable to additional duty under Section 3(1) of the Customs Tariff Act, 1975 because the notified cess under the Textile Committee legislation represented the excise duty leviable on the corresponding article manufactured in India. The Tribunal also held that the special collection machinery under the Textile Committee legislation governed the domestic cess levy only and did not bar recovery of customs additional duty on imports. The customs demand was therefore treated as a valid additional duty levy, and the assessee's objections on both issues failed.

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Issues: (i) Whether cess fixed under the Textile Committee legislation could be recovered on imported textile machinery as additional duty under the Customs Tariff Act, 1975. (ii) Whether the existence of a separate statutory machinery under the Textile Committee legislation prevented levy of the amount as customs additional duty on imports.

Issue (i): Whether cess fixed under the Textile Committee legislation could be recovered on imported textile machinery as additional duty under the Customs Tariff Act, 1975.

Analysis: The rate of cess was fixed by notification under Section 5A of the Textile Committee legislation as a duty of excise on textiles and textile machinery manufactured in India. For imported goods, Section 3(1) of the Customs Tariff Act, 1975 levies additional duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. The Tribunal held that the notified cess rate represented the excise duty leviable on the like indigenous article and could therefore be adopted for the additional duty on imported goods.

Conclusion: Yes. The cess rate was validly recoverable as additional duty on the imported goods, and the finding was against the assessee.

Issue (ii): Whether the existence of a separate statutory machinery under the Textile Committee legislation prevented levy of the amount as customs additional duty on imports.

Analysis: The Tribunal distinguished between collection of cess on goods manufactured in India and liability of imported goods under Section 3(1) of the Customs Tariff Act, 1975. The separate recovery mechanism under the Textile Committee legislation governed the domestic levy, but did not displace the charge of additional duty on imports. The customs demand was treated as a demand for additional duty, not as direct enforcement of the textile cess machinery.

Conclusion: No. The separate machinery under the Textile Committee legislation did not bar recovery of additional duty on imported goods, and the finding was against the assessee.

Final Conclusion: The Revenue's appeals succeeded, the order of the appellate authority was set aside, and the demands in the original orders were confirmed.

Ratio Decidendi: Where an imported article attracts additional duty under Section 3(1) of the Customs Tariff Act, 1975, the relevant excise-equivalent rate may be taken from a cess notified as a duty of excise on the corresponding article manufactured in India, and the domestic collection machinery under the special statute does not defeat the customs levy on imports.

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