Full Judgment
2. The issue involved in this case is whether SBR latex is eligible for exemption or not under Notification No. 82/86 dated 17.2.1986 as amended.
3. The appellants M/s. Modi Rubber Ltd., imported SBR latex. It was described in the Bill of Entry as well as in the Supplier's invoice as 'Synthetic' Rubber (SBR latex). They claimed benefit of concessional rate of duty in terms of Notification No. 82/86-Cus dated 17.2.1986 as amended. This claim was rejected by the Assistant Collector on the ground that said Notification was not applicable to Styrene-Butadiene Rubber as the same was excluded from its purview by observing that term Styrene butadiene rubber mentioned in (1A) of the said notification was used in the generic sense and hence it covers all sorts of Styrene butadiene rubber. This was confirmed in appeal by the Collector of Customs (Appeals), Bombay. Hence this appeal.
4. It was contended by Sri V. Laxmikumaran, learned Advocate, for the appellants that SBR latex and Styrene butadiene rubber are different items falling under different sub-headings and the item Styrene Butadiene Rubber refers only to Styrene Butadiene Rubber in solid form and not Styrene butadiene rubber latex which is in liquid form. In this connection he produced ISI Specification No. 5189-1985 for Cold Polymerised Styrene-Butadiene Rubber and ISI Specification No.11356-1985 for Styrene Butadiene Rubber latex to show that they are different items and their uses for different purposes. He said that in the body of the Notification while giving exemption there is clear distinction between natural and Synthetic rubber latex as well as natural or synthetic rubber but while excluding, the exclusion Clause 1A of the Notification restricts only to styrene butadiene rubber and Oil extended Styrene Butadiene Rubber but not to SBR latex. He contended that styrene butadiene rubber does not include SBR latex and wordings used in the Notification has to be construed strictly.
5. Sri M. Jayaraman, learned SDR, appearing for the revenue while countering the arguments justified the action of the lower authorities in denying the benefit under Notification No. 82/86. He submitted that the term Styrene Butadiene rubber is a comprehensive term which is inclusive of 'latex' form and other forms. He said that under Chapter 40, the heading 40.02 refers to various types of Synthetic Rubber and it makes specific mention of Styrene Butadiene rubber (SBR) and sub-classifies the same as under: He contended that in view of the Explanation under Chapter Notes items appearing under subheadings of the main heading are one and the same for the purpose of classification as well as claiming exemption under Notification. He said that tariff entry Styrene butadiene rubber itself takes within its ambit both the latex and other forms and since styrene butadiene rubber is excluded under 1A of the said Notification, the benefit cannot be extended to SBR latex.
6. We have carefully considered the arguments advanced by both sides and perused the records. The benefit of claiming exemption or otherwise depends upon the wordings used in the said Notification. Notification No. 82/86 dated 17.2.1986 as amended reads as under: Effective rate of duty for raw rubber synthetic. In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts Raw rubber, natural or synthetic rubber latex, natural or synthetic (including mixtures thereof) whether or not prevulcanised; balata, gutta percha and similar natural gums, factice derived from oils, reclaimed rubber, waste and scrap of unhardened rubber falling within Chapter 40 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) when imported into India from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of the amount calculated at the rate of 40% ad valorem.
1A. Nothing contained in this notification shall apply to styrene butadiene rubber and oil extended styrene butadiene rubber.
2. This notification shall come into force on the 28th day of February, 1986.
On going through the said Notification we are in full agreement with the appellants' counsel that there is clear distinction between Natural and Synthetic Rubber latex as well as natural or Synthetic rubber in the body of the Notification No. 82/86, but in the same manner it was not narrated in the exclusion Clause 1A of the said notification. In other words exclusion clause restricts only to Styrene butadiene rubber and oil extended Styrent butadiene rubber and not to other forms. In view of the fact that these two are different items either inform or in substance and falling under different sub-headings of the tariff, both the items cannot be treated as one and the same for the purpose of claiming exemption or otherwise. Further in view of the detailed description in the body of the notification while exempting the items and in the absence of using the term SBR latex in the exclusion clause I A, Styrene butadiene rubber does not cover SBR latex.
7. In the view we have taken we set aside the impugned order and accordingly, the appeal is allowed.