1982 (6) TMI 251 - HC - Indian Laws

Issues Involved:
1. Whether scrap rubber is considered "rubber" under the Rubber Act.
2. Whether the petitioner uses scrap rubber or only crepe rubber for manufacturing.
3. Whether the definition of "rubber" should exclude milling waste when considering scrap rubber.
4. Whether Section 12(1) of the Rubber Act and the notification fixing cess are discriminatory and violate Article 14 of the Constitution.
5. Whether there was discrimination in the assessment of cess between the petitioner and Dunlop India Limited.

Issue-wise Detailed Analysis:

1. Whether scrap rubber is considered "rubber" under the Rubber Act:
The court examined the definition of "rubber" in Section 3(h) of the Rubber Act, which includes various forms of rubber such as crude rubber, latex, and scrap rubber. The court concluded that "scrap rubber" is explicitly included in the definition of "rubber" under the Act. The argument that scrap rubber is merely a source of rubber and not rubber itself was rejected. The inclusive definition in the Act clearly categorizes scrap rubber as "rubber".

2. Whether the petitioner uses scrap rubber or only crepe rubber for manufacturing:
The court noted that the petitioner acquires scrap rubber and processes it into crepe rubber through other processors. The contention that only crepe rubber is used in manufacturing was dismissed. The court held that the acquisition of scrap rubber for manufacturing purposes constitutes "use" under the Act. The distinction between "acquire" and "use" was rebutted by referring to a previous judgment, emphasizing that the Act allows the collection of duty from manufacturers based on the rubber they acquire.

3. Whether the definition of "rubber" should exclude milling waste when considering scrap rubber:
The court rejected the argument that the definition of "rubber" should exclude milling waste in the case of scrap rubber. It was noted that the concept of "dry rubber content" applies specifically to latex and not to scrap rubber. The court found no basis to extend this concept to scrap rubber, as scrap rubber is predominantly the dry form of latex. The petitioner failed to provide any scientific process to determine the "dry rubber content" of scrap rubber.

4. Whether Section 12(1) of the Rubber Act and the notification fixing cess are discriminatory and violate Article 14 of the Constitution:
The court held that the classification between latex and other forms of rubber, including scrap rubber, is reasonable and has a nexus with the object of the Act. The legislative intent is to levy cess on rubber as defined in the Act, excluding the high water content in latex. The court found no arbitrariness or unreasonableness in not providing for the estimation of impurities in scrap rubber for cess calculation. The argument that the provisions violate Article 14 was dismissed.

5. Whether there was discrimination in the assessment of cess between the petitioner and Dunlop India Limited:
The court found no material evidence to support the claim of discrimination. The petitioner failed to provide relevant assessment orders or other materials showing that Dunlop India Limited received deductions for milling waste. The mention of milling waste in Dunlop's returns did not substantiate the claim. The court noted that audit objections were raised regarding Dunlop's assessments, and the Rubber Board was reviewing the matter. The claim of discrimination was not proven.

Conclusion:
The petition was dismissed with costs, and the court held that the petitioner is not entitled to any relief. The assessments made by the Rubber Board were upheld, and no violation of constitutional rights was found.

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