CC Vs. MALWA INDUSTRIES LTD.

JUDGEMENT

(1.) THESE appeals by the Revenue are directed against the common order of the Commissioner (Appeals) dated 3.10.2007 setting aside the assessment on the Bills of Entry.

(2.) THE respondent, M/s. Malwa Industries Ltd., is engaged in the business of textile and textile goods and in that connection imports certain goods for use as raw material in the manufacture of textile goods. It submitted Bills of Entry for clearance of Dystar Indigo VAT 40 percent SOL/Indigo Powder 90 percent Wettable falling under Tariff Heading 32041559. Additional duty (CVD) was charged on the assessable value of the goods in terms of Section 3 of the Customs Tariff Act, 1975. Feeling aggrieved and contending that the goods were not liable for excise duty under Notification No. 4/2006 -CE dated 1.3.2006, the respondent preferred appeals. By the impugned order, upholding the contention of the respondent, assessment was modified deleting the additional duty (CVD), and the appeals were allowed.

(3.) SECTION 3(1) of the Customs Tariff Act, 1975 provides for levy of additional duty equal to excise duty. If the import is found to be covered under the said Notification dated 1.3.2006, the respondent would not be liable for any additional duty as the goods in question was chargeable to 'nil' rate of excise duty. Having regard to its significance, the provision i.e. Section 3(1) may be quoted as under: 3. Levy of additional duty equal to excise duty. - (1) Any article which is imported in India shall, in addition, be liable to a duty (hereinafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article. Provided.... Explanation - In this section, the expression 'the excise duty for the time being leviable on a like article if produced or manufactured in India' means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India, or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty.