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TMI Blog1984 (11) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian Tariff Act, 1934 at the rates mentioned therein. In the year 1964 the Tariff Revision Committee was set up by the Government of India which recommended for restructuring the customs tariff in India on the basis of Brussels Nomenclature now known as "Customs Co-operation Council Nomenclature." On the basis of the said recommendation Parliament passed the Customs Tariff Act, 1975. The objects and reasons for enacting the charging section (section 2) are as follows :- "The Schedule is broadly based on the Brussels Tariff Nomenclature, but the individual headings of that Nomenclature have been either merged or sub-divided to accord with the pattern of India's Import Trade Policy." 4. The said Brussels Trade Nomenclature has been compiled by the Customs Co-operation Council, a Council constituted with the representatives of different nations of the world having its headquarters at Brussels. That is why the said Brussels Tariff Nomenclature is now renamed as Customs Cooperation Council Nomenclature or "C.C.C.N." The Indian Tariff Act, 1934 did not contain any statutory definition. Rubber and articles made of rubber previously came under Item No. 39 in the Schedule to the Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e derivatives include polyethylene products. Examples of these are polyethylene, polytetrafluoroethylene and polychlorotrifluoroethylene. Their characteristic is that they are transluscent, flexible and light in weight. They are used largely for insulating electric wire. 9. Chapter 39 B.T.N. has been bodily engrafted in Chapter 39 of Customs Tariff Act, 1975. However, the sub-classification, 01 to 06 has been merged and the Heading in the Act is 39.01/06. 10. The B.T.N. has further clarified that Chapter 40 (Rubber, synthetic rubber, etc.) excludes certain products which have some points in common with synthetic resin which do not however comply with the conditions laid down in Note 4 to the said Chapter 40, e.g., silicon rubber polyurethanes, polyesters, polyisobutylene, generally Chapter 39. 11. It is, therefore, submitted that since the statute provided a statutory definition of an article or goods mentioned in the tariff, the goods are to be classified as per the said statutory definition. The commercial test will have application only in the absence of any statutory definition. In any event, Hypalon-40 is also commercially known "synthetic resin" falling under 39.02 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties are also unsaturated. The difference between saturated and unsaturated rubber lies mainly in the degree of unsaturation. He has relied on the technical note of Hypalon-40 as synthetic rubber. According to him, to appreciate the difference between rubber and resin, one should understand the basic definition of rubber and resin. It is his submission that rubbers, both natural and synthetic, are a class of high polymers which after suitable compounding and vulcanisation, produce substance which can be extended by the application of tensile stress, even upto 1000% (in the case of pure gum compound whereas extensibility lies between 300-600% for normal compounds) and which on removal of stress, regain the original dimension almost to the fullest extent depending on the composition of the compound. They will also regain their dimension on removal of compressive stress. 16. According to him resins are also a class of high polymers which are broadly classified into two groups - thermoplasts and thermosets - former softening on heating and regaining original state on cooling while the latter can be cross-linked by suitable cross-linking agents to make thermosets which can be extended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners for the import of synthetic rubber. P.C. Borooah, J., directed release of three consignments upon furnishing of bank guarantee. The customs authorities accepted the said orders and allowed the clearance on the basis thereof and accepted the said orders. On the aforesaid facts and circumstances Mr. Pal has submitted that Hypalon-40 is synthetic rubber falling under Heading 40.01/04 and the writ petitioner in any event has made out a strong prima facie case for classifying Hypalon-40 as synthetic rubber under Heading 40.01/04. He has also submitted that the matter should not be finally left to the adjudication of the customs authorities until the writ petition is disposed of because the customs authorities have already indicated in unequivocal terms that according to them Hypalon-40 is to be classified as synthetic resin falling under Heading 39. 21. In reply it has been submitted by the customs authorities that the Import Trade Control Policy (red book) is not a statutory document. No person can claim a right on the basis of the statement contained in Import Trade Control Policy. In any event reference to I.T.C. also in the matter of classification of a product under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms T.O. No. 1 of 82-83 dated 2nd April, 1982 of the Deputy Collector of Customs as regards the assessment of Hypalon-40. According to the Deputy Collector Hypalon-40 is appropriately classifiable under Chapter 39. This T.O. on assessment by the Deputy Collector of Customs is a general instruction not based on any scientific data. It however mentions certain technical features. The conclusion reached by the Dy. Collector is that Hypalon is classifiable under Chapter 39 because Hypalon is fully saturated. It however goes on to say that Hypalon is as such saturated and that unsaturation results during curing process. Prima facie it appears that the said T.O. of the Dy. Collector proceeds on a fundamental technical mistake in that the so-called saturated rubber which are considered to be resin by the customs authorities are also unsaturated. The departmental chemist has not found, as contended by the customs authorities, that Hypalon-40, on the basis of chemical examination, does not satisfy the chemical definition of synthetic rubber. The test results have been quoted hereinabove which would go to show that no positive result was indicated but reference was made to the T.O. issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 391.C.T. as raw rubber is not in doubt. Whereas the Tariff does not specify the physical and chemical composition of a product or products which can be considered as synthetic rubber for the purposes of classifying the article under that entry, the trade usage and understanding should be the guiding factor and not the chemical composition or physical properties. In a recent judgment in Dunlop India Ltd. v. Union of India and Others and Madras Rubber Factory v. Union of India Others [(Civil Appeal 1446/72) AIR 1977 SC 597 = 1983 (13) E.L.T. 1566] the Supreme Court held that "meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject generally treat and understand them in the usual course." Viewed in the light of the Supreme Court judgment I have no hesitation in holding that the subject goods which are known in the trade and trade parlance as synthetic rubber are classifiable under Item 39 I.C.T. with additional duty under Item 16AA C.E.T. 28. It will be evident from the said order of the Appellate Collector of Customs that in coming to his conclusion certain factors weighed with him. Firstly, in technical literature Hypa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port licence granted to the importer in that case was for synthetic rubber and the said licence was accepted by the customs authorities for importing Hypalon-40. Thirdly, the Import Trade Control Policy for the year 1977-78 included Hypalon-40 in the category of synthetic rubber. Fourthly, the Appellate Collector of Customs, Madras classified Hypalon-40 as synthetic rubber in his order dated 26th November, 1976. Fifthly, the chemical report on which the Department relied was not conclusive and lastly, the interpretation of the Customs Tariff Act was not clear. 31. The contention of the customs authorities that the said order of the Appellate Collector, Calcutta is under appeal and therefore not binding on the customs authorities cannot be accepted. No materials have been disclosed to substantiate the submission that such appeal has been preferred or is pending. Assuming, however, that an appeal is pending the same cannot make the order appealed from non est. Until the said order of the Appellate Collector is set aside by the Tribunal, adjudicating authorities of the Customs Department are bound by the said decision. If the appellate authority directs refund of the payment of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the classification in the Import and Export Policy must have taken into consideration that in international market Hypalon-40 is recognised as synthetic rubber. So also international trade and commerce conversant with the subject treated and understood Hypalon 40 as synthetic rubber. The Directorate General of Technical Development, Government of India registered the contract of the petitioner for import of synthetic rubber and the petitioner imported Hypalon-40 as Hypalon-40 is the trade name of synthetic rubber manufactured by Du pont. The petitioners are engaged in manufacture and sale of various types of electrical cables and wires and imports Hypalon-40 for being used as insulation of the wires and cables manufactured by the writ-petitioner. The commodity is purchased in the trade name. Hypalon-40 is the trade name and is known all over the world and trade and commerce as synthetic rubber. If an item is universally recognised as such in trade and industry, an artificial definition cannot be relied on for the purpose of holding that such item is not synthetic rubber. 34. The notification which has been relied on by Mr. Ghosh in respect of his contention that Customs Tariff Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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