1997 (1) TMI 526

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....n Woven Dipped Diffusion Resistance Fabric, Goodyear Code EO2 NN. The imported goods were cleared upon payment of duty as demanded. The appellants then claimed refund of the additional duty paid by them as now stated. The claim having been refused by the authorities below, the Tribunal was moved. 2. The Customs Tariff Act, 1975, prescribes in Section 3 for the levy of additional duty equal to excise duty. Sub-section (1), its Explanation and sub-section (3) of Section 3 are relevant, and they read thus : "3. Levy of Additional duty equal to excise duty. - (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise dut....

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....by notification in the Official Gazette, direct that such imported article shall, in addition, be liable to an additional duty representing such portion of the excise duty leviable on such raw materials, components and ingredients as, in either case, may be determined by rules made by the Central Government in this behalf." 3. Under the provisions of Section 3(3) of the Customs Tariff Act, the Additional Duty Rules, 1976, have been framed. Rule 2 states that for the purposes of Section 3(3) "the additional duty leviable on any imported article specified in column (2) of the Table annexed hereto shall be equal to the excise duty for the time being leviable on the material specified in the corresponding entry in column (3) of the said....

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.... 56.80   (iii) 88 deniers and above but below      121 deniers 49.80   (iv) 121 deniers and above but below      165 deniers 42.80   (v) 165 deniers and above 24.60    *          *         *        Explanation I. - "base yarn" means yarn falling under sub-item II(i)(a) of Item No. 18 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from which textured yarn has been produced; ............................................................................................................

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....e rate of duty is Rs. 24.60 per kg. [Sl. No. 2(a)(v) of Notification 55/78]. In such a situation, the yarn content of the imported fabrics would attract duty at the higher rate viz., Rs. 24.60 per kg. (plus special excise duty as may be applicable)." 6. Learned Counsel for the appellants submitted that once the Tribunal had come to the conclusion that the imported goods were textured yarn produced out of base yarn, only that amount of additional duty was payable thereon as was specified against the description "textured yarn produced out of base yarn" in the Table of the said notification. There was no question then of requiring the appellants to pay additional duty at a rate specified in the notification for "other textured yarn". ....

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.... The Central Government may, by notification in the Official Gazette, direct that an imported article shall bear additional duty representing such portion of the excise duty leviable on such raw materials, components and ingredients as it may by rules determine. It is in exercise of the power conferred by Section 3(3) that the Additional Duty Rules, 1976, have been framed and they specify that additional duty shall be imposed on fabrics containing more than 10 per cent by weight of synthetic fibre or yarn which shall be equivalent to the excise duty leviable on the synthetic fibre and yarn used therein. 9. Insofar as the imported goods are concerned, they fall, as the Tribunal has found, in the category of "textured yarn produced ou....

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....the goods imported by the assessee [are] "parts of refrigerating and air-conditioning equipment". They are chargeable at different rates of duty accordingly as they fall under item with Serial No. 4 (80 per cent) or that with Serial No. 5 (nil) or that with Serial No. 6 (20 per cent) or that with Serial Nos. 7 and 8 (25 per cent). In such a situation, he says, the provisions of the Explanation to Section 3(1) are attracted and hence the assessee will be liable to duty at the highest rate of 80 per cent. We are loth to permit the department to raise at this stage a fresh contention no taken before the Tribunal or earlier. That apart, we do not think it is well founded. It is no doubt true that Item 29A of the Schedule to the C.E. Act is very....