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Levy of additional duty of customs on retreaded tyres. Analysis: The case involved a revision application under Section 131 of the Customs Act, 1962, treated as an appeal before the Tribunal. The appeal concerned the levy of additional duty of customs on aircraft tyres sent abroad by M/s. Indian Airlines and re-imported after retreading. The Customs authorities charged the re-imported tyres with basic customs duty and additional duty under Section 3(1) of the Customs Tariff Act, 1975, based on the cost of retreading, insurance, and freight charges, as per Notification No. 204-Cus. The appellants argued that no countervailing duty should be levied on retreaded tyres, citing that excise duty is chargeable only on new goods. They relied on legal judgments and trade notices to support their contention. The Respondent Collector argued that the duty under Section 3(1) of the Customs Tariff Act is a customs duty, not exempt from Central excise duty. He emphasized that retreaded tyres are still tyres and subject to duty. The Respondent contended that the levy of countervailing duty on retreaded tyres was legal, as it was based on repair charges, freight, and insurance, not the full value of the tyres. The Respondent urged that the orders of the Assistant Collector and the Appellate Collector were correct and should be upheld. The Tribunal analyzed the provisions of Section 3(1) of the Customs Tariff Act, emphasizing that the additional duty is a customs duty equated to excise duty on a like article produced in India. The Tribunal clarified that excise duty procedures do not apply to additional duty. The appellants' argument that additional duty should be calculated as excise duty was deemed unfounded. The Tribunal highlighted that the additional duty is applicable to imported articles based on the class or description to which they belong, not the last process performed on them. The Tribunal rejected the appellants' claim that retreaded tyres should be exempt from additional duty, emphasizing that the description of "tyres" under the Central Excise Tariff Schedule includes retreaded tyres. The Tribunal noted that even if a tyre is not chargeable to excise duty due to previous manufacturing stages, it is still liable to additional customs duty. The Tribunal concluded that the additional duty on the re-imported tyres was correctly levied based on repair charges, freight, and insurance, upholding the decision of the Appellate Collector and rejecting the appeal.
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