The levy of additional duty under Section 3 of the Customs Tariff Act, 1975, is contingent upon the existence of an excise duty in force and leviable on the goods. Exemption notifications under the Central Excise Rules can be used to determine the levy of additional duty.

In this batch of writ petitions, the question raised relates to the liability to pay on the 'natural rubber' imported for the petitioners, additional duty under Section 3 of the Customs Tariff Act 51 of 1975, hereinafter referred to as the Act. Item-wise 'natural rubber' bears different names and in the present batch of writ petitions, we are concerned with the natural rubber bearing the name 'smoked sheets'. In some cases, the petitioners have paid the additional duty through the State Trading Corporation, which was the agency for the import of this product, since the said product was a canalised one. The State Trading Corporation, when it collected the price from the petitioners, the additional duty was part and parcel of the price paid by the petitioners. In those cases, the petitioners have asked for refund. The petitioners also apprehending levy and collection of additional duty have asked forwrits of mandamusto forbear the respondents from so levying and collecting the additional duty in respect of imports for which such payments were not yet made. In some of writ petitions, the petitioners have prayed for the issue of declaration that the levy of duty on 'natural rubber' is illegal.

2.In support of the prayers in the writ petitions, Mr. Habibulla Badsha, learned Counsel appearing for the petitioners in majority of the writ petitions, followed by Mr. Uttama Reddi, learned Counsel appearing for the petitioners in some of the writ petitions, would advance the following points, which I shall deal with in seriatim.

3.Firstly, it is contended that as per Section 3(1) of the Act, there could be levy of additional duty equal to the excise duty for the time being leviable on a like article and if no excise duty is leviable for the time being, there is no question of levy of additional duty. Learned Counsel for the petitioners would submit that the expressions 'for the time being leviable' occurring in that provision, must be construed in the light of the explanation thereto, and if so done, there ought to be levy of excise duty in force and then only the liability to pay the additional duty would arise. Learned Counsel would submit that 'natural rubber' is not a product by any manufacturing process, so as to attract levy of excise duty, and when levy of excise duty cannot be imposed and inforced in respect of such a product, there could not be levy of additional duty, to appreciate this submission, it is necessary to extract Section 3 sub-section (1) and the explanation thereto as follows -

"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 per centage 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 so 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.'

Coming to excise duty, it is the admitted case that the First Schedule to the Central Excises and Salt Act, 1944 does not contain any specific item under which there could be levy of excise duty on natural rubber. The Revenue wants to have recourse to the residuary Item 68. Even with reference to recourse to the residuary Item 68, what is contended by the learned Counsel for the petitioners before