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TMI Blog1992 (6) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... erence: Heading No. 40.01 : Natural rubber, balata guttas-percha, guayule, chicle and similar natural gums, in primary forms or in plates, sheets or strip. Sub-heading 4001.10 : Natural rubber latex, whether or not prevulcanised. The learned original authority has taken note of the fact that while this item heading among other things covers natural rubber and the latex is not mentioned therein, by virtue of interpretative Rule 3(a), the same is assessable under Chapter 40 ibid. The learned lower original adjudicating authority has held that Notification 21/85 covers only natural raw rubber whereas the item imported is natural raw rubber latex in the form of liquid and this is at a stage before production of natural raw rubber as natural rubber latex is collected from the rubber trees and after preserving with acid and water it attains the form of natural raw rubber in the required form in lumps or in irregular sheet without any specific shape. He has further observed that natural or synthetic rubber latex is specifically covered by Notification No. 82/86 and that benefit of assessment @ 40% is available in respect of this item and therefore the same has to be charged to duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grieved against this finding of the Collector (Appeals) and has urged as under: "The goods imported now are natural rubber latex which are different from natural rubber. Latex is the first stage before production of natural raw rubber. This will directly be collected from Rubber trees and after preserving the same in acid and water it attains the character of natural raw rubber in the required form i.e. lumps or in irregular sheet or without any specific shape. This natural or synthetic rubber latex is specifically covered by CN 82/86, with effective basic rate of duty @ 40% ad valorem whereas the CN 21/85 covers only the natural rubber. It is well settled law that a specific description will always prevail over any other general description. Hence the correct Notification applicable in this case is CN 82/86 and not 21/85." 4. The learned Departmental Representative reiterated the grounds of appeal and urged that latex could not be equated with rubber as such and two are known as two different commodities in the trade and drew our attention to the definition of rubber as given in the McGraw-Hill Dictionary of Scientific and Technical terms. He pleaded that as it is there are sepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the term rubber tree it is set out as under: "A tall tree of the spurge family (Euphorbiaceae) from which latex is collected and coagulated to produce rubber." Under the term 'rubber' in McGraw-Hill Encyclopedia of Science & Technology following is set out on page 757: "A useful way of visualizing rubber structure is to consider as a model bundle of wiggling snakes in constant motion. When the bundle is stretched and released, it tends to return to its original condition. If there were no entanglements, stretching the bundle would pull it apart. The more entanglements, the greater the tendency to recover, corresponding to cross-links in rubber. In rubbers, the characteristic property of reversible extensibility results from the randomly coiled arrangement of the long polymer chains. Upon extension the chains are elongated in a more or less orderly array. The tendency to revert to original coiled disarray upon removal of the stress accounts for the elastic behavior. Vulcanizing rubber increases the number of cross-links and improves the properties. Natural rubber and most synthetic rubbers are also commercially available in the form of latex, a colloidal suspension of polymers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... latex, a process involving the use of lighter equipment and less power than the mixing of solid rubber compounds. The latex compound can then be used in a variety of processes such as coating or impregnating of cords, fabrics, or paper; in paints or adhesives; molding (such as in toys); dipping (for thin articles like balloons, or household and surgeon's gloves); rubber thread (for garments) and production of foam. Latex technology is particularly important in producing articles for medical and surgical uses. The term 'rubber'as defined in the introductory chapter 'Rubber' in the Encyclopaedia Britannica 15th Volume is as under: "Rubber is an organic substance obtained from natural sources or synthesized artificially which has the desirable properties of extensibility and toughness. Previously known as caoutchouc, a term that has become limited to the chemically pure form of the substance, rubber acquired its name from its ability to erase pencil marks. Initially, all rubber was natural. Formed in a living tree it consisted of the solids separated (coagulated) from the milky fluid latex, which occurs under the bark of many tropical and sub-tropical trees and shrubs." Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emains in the coagulated solid. Dried rubber typically contains 92 to 94 percent chemically pure C5H8, 0.13 to 1.20 percent water, 2.50 to 3.20 percent acetone extract, 2.50 to 3.50 percent nitrogenous substances, and 0.15 to 0.50 percent ash." Distinctive uses of natural rubber and Distinctive uses of natural rubber latex under the sub-heading in this Encyclopaedia among other things are set out as under: Distinctive uses of natural rubber. - Though natural performs well in most applications, some of the newer synthetics surpass it for specialised purposes. For example, acrylonitrile rubber has much better oil resistance, butyl rubber is much less permeable to air, and silicone rubber withstands higher temperatures. Natural rubber is still preferred in applications that demand elasticity, resilience, tackiness, and low heat build up. Natural rubber also is chosen when it has no particular technical advantage over synthetics but is competitive for price or availability. Natural rubber is indispensable for the treads of tires for racing cars, bus and truck tires, airplane tires, and any other form of transport where conditions are particularly severe and. where a buildup of heat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich a predetermined quantity of foam was inserted, the mold closing during its progress to the oven. Washing, drying and finishing completed the process. For large scale, production, a new method has supplanted this early method, which is still in active service. The process consists of filling a fixed mold with metered quantity of foam, sealing it with its lid, and evacuating the air; the foam expands to partly fill the resulting vacuum, and then is frozen; next, carbon dioxide gas is passed in to fill the remaining vacuum in the foam, and the temperature is raised to 104°C (219°F) for curing. The carpet industry has made increasing use of latex not only as a separate form rubber underlay but as an undercoating on the carpet itself and as an anchoring matrix for tufted carpets. The latex may be either a vulcanizable natural rubber compound or a synthetic self-curing compound. Foams frequently comprise a blend of natural and styrene-butadiene rubbers, the latter reducing the cost with some reduction in resilience." 7. According to the book 'Rubber Technology' edited by Maurice Morton, Director, Institute of Polymer Science, University of Akron, Akro, Ohio and published b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llon drums coated internally to prevent corrosion or contamination." Composition is described as under: "Commercial raw natural rubber has a small, but highly important number of non-rubber constituents. These may comprise as much as 5-8% of the total composition. Most important are the natural occurring antioxidants and activators of cure, represented by the proteins, sugars and fatty acids, Typical composition is as shown in Table 6.2. TABLE 6.2 ANALYSIS OF REPRESENTATIVE NATURAL RUBBER Ingredient Ave. %, Range % Moisture 0.5 0.3-1.0 Acetone Extract 2.5 1.5-4.5 Protein 2.5 2.0-3.0 Ash 0.3 0.2-0.5 Rubber Hydrocarbon 94.2 Total 100.0 TABLE 6.3 APPROXIMATE CONCENTRATIONS OF NON-RUBBER CONSTITUENTS IN CENTRIFUGED LATEX CONCENTRATES Constituent Percentage by weight of latex Fatty acid soaps (e.g. ammonium oleate) 0.5 Sterols and sterol esters 0.5 Proteins 0.8 Quebrachito 0.3 Choline 0.1 Glycerophosphate 0.1 Water-soluble carboxylic acid salts (Acetate, citrate, etc.) 0.3 Amino acids and polypeptides 0.2 Inorganic salts (ammonium potassium carbonate and phosphate etc.) 0.2 Under sub-he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sives. 8. It is seen that under the Customs Tariff under Chapter 40, the term 'rubber' has been defined for the purpose of tariff as under : "throughout the Nomenclature the expression 'rubber' means the following products, whether or not vulcanised or hard : natural rubber balata, gutta-percha, guayule, chicle and similar natural gums, synthetic rubber, factice derived from oils and such substances reclaimed." and Heading 40.01 covers natural rubber among other items as seen from the entry reproduced above in primary form or in plates, sheets or strip. The term 'primary forms' in Note 3 of Chapter 40 is stated to apply to the following form: (a) Liquids and pastes (including latex, whether or not pre-vulcanised, and other dispersions and solutions); (b) Blocks of irregular shape, lumps, bales, powders, granules, crumbs and similar bulk forms. Further in Note 5(b), it has been stated as under: The presence of the following substances in any rubber or mixture of rubbers shall not affect its classification in Heading No. 40.01 or 40.02, as the case may be, provided that such rubber or mixture of rubbers retains its original character as a raw material: (i) emulsifiers or anti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similarly worded as under: "Natural rubber in other forms." It has been set out under this heading that this heading includes: "(A) Natural rubber latex (whether or not pre-vulcanised). Natural rubber latex is the liquid secreted principally by rubber trees and, in particular, by the species Hevea brasiliensis. This liquid consists of an aqueous solution of organic and mineral substances (proteins, fatty acids and their derivatives, salts, sugars and glycosides) containing in suspension 30% to 40% of rubber (i.e. polyisoprene of high molecular weight). This part includes: (1) Stabilised or concentrated natural rubber latex. Rubber latex tends to coagulate spontaneously a few hours after tapping; it must therefore be stabilised in order to ensure preservation and to prevent putrefaction or, coagulation. This is usually done by adding ammonia to latex in the proportion of 5 to 7 grams per litre of latex, which produces a product known as "full ammonia" or FA type. A second stabilising method which produces "low ammonia" or LA type is to add a very small quantity (1 to 2 grams per litre of latex) of a low concentration mixture of ammonia and substances such as tetramethylthiuramd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt of tariff entry which carries the main heading 'natural rubber' and under which natural rubber latex is specifically mentioned under sub-heading 4001.10, and natural rubber in other forms under sub-headings 4001.21, 4001.22 and 4001.29, whether the latex imported can be taken to be natural raw rubber. Before going into this question we have to consider as to whether what can be the scope of the term 'natural raw rubber'. Rubber as such is a generic term and as brought out above, historically it was obtained from the Plant and origin and major source of the; same is Hevea brasiliensis and the latex dried from that was found to contain rubber globules which, on coagulation showed the ability to rub off pencil marks and therefore came to be known as rubber. In the tariff the term 'rubber' is made applicable to natural rubber among other things whether or not vulcanised or hard and as seen from the tariff the term 'rubber' is taken to cover latex also. The latex imported on test has been found to be natural raw rubber latex in the form of white liquid with solid content of 61.5%. This latex as seen from the expression in the technical books is stabilised or concentrated from the ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubber. It may be seen that tariff as it is worded under 4001.10 covers natural rubber latex under main heading 'Rubber' whether or not pre-vulcanised and then carries further sub-heading 'natural rubber in other forms and these figure under Headings 4001.21, 4001.22 and 4001.29. This clearly shows that sub-heading 4001.10 covers one form of natural rubber and the other forms are covered by other tariff headings. The inference being natural rubber latex is considered as a form of natural rubber and again being in the nature of raw material in primary form, it therefore, can be considered as natural raw rubber. 10. The Revenue has laid a lot of stress that Notification 82/86 specifically 3 covers natural synthetic rubber latex and Notification 21/85 is specific for natural raw rubber and pleaded that the framers of the statute have considered natural raw rubber as not to include natural rubber latex and that is why a separate Notification for rubber latex was required to be issued. We observe that the two Notifications have been issued at two different points of time and while Notification 82/86 covers most of the items falling under Chapter 40, Notification 21/85 gives higher benef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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