COLLECTOR OF CUSTOMS, BANGALORE vs WESTERN INDIA PLYWOOD MFG. CO. LTD. AND ANR.

The Supreme Court held that under Notification No. 126 of 1984, the auxiliary duty on timber imported from exempted countries must be calculated based on the effective basic duty applicable to such articles, as per Section 25(1) of the Customs Act, 1962. The Court found that the Tribunal erred in its interpretation, affirming that the auxiliary duty of 40% paid by the assessee was correct, and thus the refund claim was not maintainable. The Court clarified that the explanation in the notification allows for the higher auxiliary duty to be applicable when different rates are set for articles based on their country of origin.