JUDGMENT

BHARUCHA, J. - The appeal arises upon a judgment delivered by the Customs, Excise and Gold (Control) Appellate Tribunal. The appellants imported bulked nylon fabric. The bill of entry described the imported goods as being Nylon Woven Dipped Diffusion Resistance Fabric, Goodyear Code EO2 NN. The imported goods wen 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 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.

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 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.

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(3) If the Central Government is satisfied that it is necessary in the public interest to levy on any imported article [whether on such article duty is leviable under sub-section (1) or not] such additional duty as would counter-balance the excise duty leviable on any raw materials, components and ingredients of the same nature as, or similar to those, used in the production or manufacture of such article, it may, 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 Table to the extent that material is used in the manufacture of the imported article". The table reads thus :

TABLE

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S. No. Name of article Name of material

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(1) (2) (3)

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1. Fabrics containing more than 10 per Synthetic fibre

cent by weight of synthetic fibre or and yarn

yarn.

2. * * *

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4. In exercise of the powers conferred by Rule 8 of the Central Excise Rules, 1944, the Central Government, by Notification No. 55 of 1978 dated 1-3-1978, (hereinafter called "the said notification") exempted textured yar