The main legal point established in the judgment is the interpretation and application of Section 3 of the Customs Tariff Act, 1975, and the relevance of relevant notifications in determining the eligibility for exemption from the levy of additional duty.

S. R. RAJASEKHARA MURTHY, J.

( 1 ) THE Petitioner-Company, which is a manufacturer of watches, imported certain components for the purpose of manufacture of watches in its factory.

( 2 ) THE Collector of Customs and Central Excise, Bangalore levied additional duty or countervailing duty on the watch components so imported by the petitioner under Section 3 of the Customs Tariff Act, 1975. This levy is challenged by the petitioner in this writ petition.

( 3 ) THE petitioner, relying upon the notification 240/78/cus, Annexure-C, has urged that the levy of additional duty under Section 3 of the Customs Tariff Act is without authority of law and has prayed for a consequential order of refund of the duty so paid and collected. The petitioner has also relied upon notification 178/77 issued under Rule 8 (1) of the Central excise Rules, which is superseded by notification 201/79.

( 4 ) THE writ petition is resisted on behalf of the Revenue by Sri Shivashankar Bhat that the writ petition filed without exhausting alternative remedy under the Act should be dismissed in limine. However, since I have heard arguments on merits and the writ petition is of the year 1979, I propose to dispose of the writ petition on its merits.

( 5 ) ADDITIONAL duty known as countervailing duty equal to excise duty leviable on a like article if produced or manufactured in India is levied under Section 3 of the Customs Tariff Act on any article imported. Section 3 reads 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 (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 the percentage of the value of the imported article".

( 6 ) THE charging section under the Customs Tariff Act is Section 3. This is to be read along with section 25 of the Customs Act, 1962, under which the Central Government may exempt from the whole or any part of the Customs duty leviable on any goods. The Notification No. 240/78 dated 30th December, 1978, which is produced as Ext. 'c', to the petition is a notification issued under Section 25 which exempts the wrist watches and wrist watch parts from so much of that portion of the duty of customs leviable thereon as specified in the first schedule to the Act as is in excess of 50% ad valorem. This notification which is relied upon by the petitioner is not relevant for the purpose of deciding whether the components of watch parts imported by the petitioner could be exempted from the levy of additional duty under section 3 of the Customs Tariff Act.

( 7 ) THIS argument is countered by the learned Counsel for the respondents that the component parts imported by the petitioner-Company, are not eligible for exemption under Notification 118/75. According to his submission, only the components manufactured in a factory and intended for use in the same factory in which the finished products are manufactured, are eligible for exemption from the whole of the excise duty. The watch components which are imported by the petitioner-Company are not the component parts referred to in the notification No. 118 of 1975, and are therefore not eligible for exemption. It is also opposed on the ground that the claim of the petitioner is too far fetched and has no relevance and do not satisfy the terms of the exemption as mentioned in Notification No. 118/75.

( 8 ) THE petitioner has, in support of his contention relied upon the decision of the Bombay High court in the case of Century Enka Ltd. v. Union of India, 1982 ELT 64 (Bombay ). Their lordships of the Bombay High Court have held, that the polymaid chips imported by the petitioner-company would be eligible for exemptio

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