Circular No. 9/89 Dated 10-2-1989

Set-off of additional duty paid on imported naphthalenes.- A doubt has been raised as to whether set-off of duty on imported naphthalenes under the Customs Tariff Act, 1975 would be available under Notification No. 432/86-C.E., dated 6-10-1986, as amended.

2. The matter has been examined. Notification No. 432/86-C.E., dated 6-10-1986, as amended, exempts certain specified final products from so much of the duty of excise leviable thereon as is equivalent to the duty of excise already paid on certain specified inputs. In the said notification, ‘duty of excise’ has been described as ‘duty of excise’ under Central Excises and Salt Act, 1944. It does not expressly provide for set-off of additional duty under the Customs Tariff Act, 1975. Although the additional duty under the Customs Tariff Act, 1975 is levied on imported goods at the rate equivalent to the rate of excise duty charged on like goods manufactured in India under Central Excises and Salt Act, 1944, such additional duty can never be equated with excise duty. That is why wherever the intention is to allow set-off of additional duty leviable under the Customs Tariff Act, 1975, a provision to that effect is incorporated in the notification itself. By way of example, Notification No. 225/86-C.E., dated 3-4-1986, as amended, may be referred to.

3. The above guidelines may be brought to the notice of the lower field formations and the trade interests may also be suitably informed.

4. All pending assessments may be finalised on the above basis.

[F. No. 83/3/89-CX.3]