1984 (3) TMI 401 - AT - Customs

Summary

Issues:
Interpretation of Section 3(1) of the Customs Tariff Act, 1975 regarding the levy of countervailing duty on imported goods.

Analysis:
The case involved a revision application filed by M/s. Union Carbide India Limited challenging the levy of countervailing duty on the import of Methyl Isocyanate for the manufacture of Carbaryl. The appellants argued that since the said product was not manufactured in India and did not fall under any excise tariff item, no countervailing duty should be payable. The Appellate Collector of Customs upheld the duty levy, leading to the appeal.

The appellants contended that under Section 3 of the Customs Tariff Act, countervailing duty is only applicable if a like article is produced or manufactured in India. They argued that since the said product did not belong to any class attracting excise duty, no additional duty should be payable. They also highlighted the purpose of countervailing duty to counterbalance excise duty on indigenous products.

The departmental representative countered, stating that Section 3(1) of the Act mandates countervailing duty regardless of local production of like goods. He emphasized that the memorandum of objects is irrelevant if the statutory provisions are clear, as in this case. The representative supported the Appellate Collector's decision, asserting no ambiguity in the law.

The Tribunal analyzed Section 3(1) and its explanation, which clarified that countervailing duty applies even if like goods are not manufactured locally but would attract excise duty if produced in India. The Tribunal cited a Gujarat High Court decision supporting this interpretation. It concluded that since the imported product would have attracted excise duty if manufactured in India, the levy of countervailing duty was justified.

The Tribunal dismissed the appeal, stating that it cannot question the legality of provisions but must interpret the statute as it stands. It affirmed the correctness of the countervailing duty imposition based on the statutory provisions and explanation of Section 3(1) of the Customs Tariff Act, 1975.