9911796707
TMI Blog2001 (2) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... waste and scrap of the imported raw material, namely, Cellulose Acetate sheets, Customs Duty as well as additional duty is payable on the scrap being cleared for home consumption outside the Free Trade Zone. Undisputedly, on two clearances of the scrap, Customs Duty was assessed and the same was paid by the respondent. It was, however, later discovered during the audit that while assessing the liability, the respondent had been wrongly given benefit of Notification No. 16/83-C.E., dated 11-2-1983 and additional duty under Section 3(1) of the Customs Tariff Act, 1975 was not levied. The duty was found to be short paid. Thus, two Demand Notices under section 28 of the Customs Act, 1962 were issued in respect of two clearances, namely, Demand Notice No. FIZ/Cus/Demand/87-/7545/73, dated 26-6-1989 for a sum of Rs. 60,480/- and Demand Notice No. FIZ/Cus/Demand/85-86/1347, dated 16-10-1989 for a sum of Rs. 8870.40. 4.The aforesaid two demands for additional duty were confirmed by the Assistant Collector (Custom), Kandla Free Zone by order dated 22-6-1989 for a sum of Rs. 68076.40 and by order dated 16-10-1989 for a sum of Rs. 8870.40 holding that the Duty was short levied and benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e imported articles belongs. 7.The main stress on behalf of the appellant is that the second condition as contained in the Notification No. 16/83-C.E. has not been fulfilled hence exemption from Excise Duty would not be available to the respondent. That being the position, the additional duty as leviable is liable to be levied and paid under Section 3(1) of the Customs Tariff Act, 1975. 8.Before entering into the discussion, it would be appropriate to peruse the provisions as contained under Section 3 of the Customs Tariff Act, 1975 as well as Notification No. 16/83-C.E. issued under Rule 8(1) of the Excise Rules, 1944. Section 3 off the Customs Tariff Act reads as under : "SECTION 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 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hedules. The additional duty is in addition to what is specified in the first and second schedule of the Customs Tariff Act. It can be said that first part of Section 3(1) of the Customs Tariff Act, 1975 is charging provision for the purposes of imposition of additional duty and the latter part is in relation to quantification of the additional duty equal to Excise Duty. In regard to the question as to whether Section 3(1) is a charging provision for additional duty or not, it was held by Three Judge Bench of this Court in the case of Khandelwal Metal & Engineering Works - 1985 (20) E.L.T. 222 (S.C.) = AIR 1985 SC 1211, that Section 3 (1) cannot be said to be an independent charging Section. It was held to be an extended provision of Section 12 of the Customs Act, 1962 for the purposes of additional duty. Later on however this question again came to be considered in the case of Hyderabad Industries Ltd. - 1999 (108) E.L.T. 321 (S.C.), = (1999) 5 SCC 15 before a Constitution Bench of this Court and it was held that Section 3 of Customs Tariff Act is a charging provision for additional duty. It has also been held that under Section 3 of the Customs Tariff Act, the additional duty is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Their case is that basic customs duty has been paid which fulfils the requirement. The Notification however requires payment of "duties" of customs under any law for the time being in force. The additional duty leviable under sub-section (1) of Section 3 of the Customs Tariff Act is not described or called as countervailing duty as observed in the case of Hyderabad Industries (supra) as well as in the case of Khandelwal Metal & Engineering Works (supra) despite the purpose whichever it may serve. There is a specific provision under sub-section (3) of Section 3 of the Customs Tariff Act, 1975, quoted earlier, providing for levy of additional duty, whether on such item additional duty under sub-section (1) of Section 3 is leviable or not, to counter-balance the Excise Duty. The clause (b) to the proviso to the Notification No. 16/83-C.E. provides for clearance of all duties of customs leviable under any law for the time being in force. It does not confine to payment of customs duty leviable under the Customs Act, 1962 alone. Therefore, additional duty levied under Section 3(1) of Customs Tariff Act shall also have to be cleared before claiming benefit under Notification No. 16/83- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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