1992 (6) TMI 113 - AT - Customs

Summary

Issues Involved:
1. Classification of natural rubber latex under Customs Tariff.
2. Eligibility of natural rubber latex for benefit under Notification No. 21/85.
3. Applicability of Notification No. 82/86 to natural rubber latex.

Detailed Analysis:

1. Classification of Natural Rubber Latex under Customs Tariff:
The primary issue revolves around the classification of natural rubber latex under Chapter 40 of the Customs Tariff. The original authority assessed the imported goods under Heading 40.01, which includes "Natural rubber, balata, gutta-percha, guayule, chicle and similar natural gums, in primary forms or in plates, sheets or strip." Specifically, sub-heading 4001.10 covers "Natural rubber latex, whether or not prevulcanised." The authorities noted that the imported goods were in the form of a white liquid with a solid content of 61.5%, classifying it under Chapter 40 as natural rubber latex.

2. Eligibility of Natural Rubber Latex for Benefit under Notification No. 21/85:
The Respondents claimed the benefit of Notification No. 21/85, which exempts natural raw rubber falling under Heading 40.01 from customs duty in excess of 20% and the whole of the additional duty. The Collector (Appeals) allowed this claim, stating that "Notification 21/85 Cus dated 1-2-1985, as amended exempts Natural Raw Rubber falling under Heading 40.01 from the customs duty in excess of 20% ad valorem and from whole of the additional customs duty." The Collector (Appeals) found that there was nothing in the definition of 'Rubber' in Chapter Notes under Chapter 40 to exclude natural raw rubber latex from the ambit of Chapter 40.

3. Applicability of Notification No. 82/86 to Natural Rubber Latex:
The original authority held that Notification 82/86, which covers raw rubber, synthetic or natural latex, among other items, with an effective duty rate of 40%, was applicable. The Department argued that latex is different from natural rubber and that Notification 82/86 specifically covers natural rubber latex. They contended that "a specific description will always prevail over any other general description," implying that Notification 82/86 should apply instead of Notification 21/85.

Conclusion:
The Tribunal examined the nature of natural rubber latex and raw rubber in solid form. It noted that latex is a milky colloid in which natural rubber is suspended in water, and upon processing, it can be transformed into solid rubber. The Tribunal found that latex is considered a form of natural rubber and can be used as raw material for various products, making it eligible for the benefit of Notification 21/85. The Tribunal held that "natural rubber latex is covered by the term natural raw rubber," thereby rejecting the Department's appeal and upholding the Collector (Appeals)'s decision to grant the benefit under Notification 21/85 to the Respondents.