Excise exemption applies to additional customs duty when imported goods satisfy the notification conditions.

For purposes of additional duty of customs under Section 3(1) of the Customs Tariff Act, 1975, the excise duty "for the time being leviable" on a like domestic article includes the effect of a valid Central Excise exemption notification where its conditions are satisfied. The importer is treated like a domestic manufacturer for this limited computation, so an unconditional excise exemption cannot be ignored merely because the goods are imported. The exemption therefore applied to the duty calculation, the refund claim was maintainable, and the revenue appeal failed.

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Issues: Whether exemption granted by a notification issued under Rule 8(1) of the Central Excise Rules, 1944 is available while determining additional duty of customs leviable under Section 3(1) of the Customs Tariff Act, 1975 on imported goods.

Analysis: The liability to additional duty of customs is to be computed with reference to the excise duty for the time being leviable on a like article if produced or manufactured in India. Where the relevant excise notification grants unconditional exemption on the requisite use or description of goods, that exemption cannot be ignored merely because the goods are imported. The governing principle is that the importer is to be placed in the position of a domestic manufacturer for the limited purpose of determining the amount of additional duty, and the benefit of the excise exemption follows the goods if the underlying conditions are satisfied.

Conclusion: The exemption under the Central Excise notification was applicable for determining additional duty of customs, and the refund claim was maintainable.

Final Conclusion: The revenue appeal failed, and the order granting refund with consequential relief was sustained.

Ratio Decidendi: For the purpose of Section 3(1) of the Customs Tariff Act, 1975, an exemption from excise duty under a valid Central Excise notification is relevant to the computation of additional duty of customs on imported goods when the conditions of the exemption are fulfilled.

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