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PETITIONER: COLLECTOR OF CUSTOMS

       Vs.

RESPONDENT: M/S.  MODI RUBBER LTD.

DATE OF JUDGMENT:       01/12/1999

BENCH: S.P.Bharucha, R.C.Lahoti, N.Santosh Hegde,

JUDGMENT:

S.  P Bharucha, J.

     The  respondents  imported  styrene  butadiene  latex. They  claimed  for tha purposes of payment of  Customs  duty thereon  the  benefit  of  an  exemption  notification  (No. 82/86),  as amended on 2nd April, 1986.  So amended, this is how the said notification read:

     "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,  guttepercha  and  similar   natural  gums,  factice derived  from  oils, reclaimed rubber, waster 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.  "

     The  exemption  was denied to the ’respondents on  the ground that under clause 1A of the said notification styrene butadiene  latex was not entitled to it.  This was the  view taken  all  the  way  upto  the  Customs,  Excise  and  Gold (Control) Appellate Tribunal, whose order is under challenge before  us.  The Tribunal decided in favour of the assessee, agreeing with the argument of its counsel that the exclusion in  clause  1A was only of styrene butadiene rubber and  oil extended  styrene  butadiene rubber and did not cover  other forms of styrene butadiene.

     It  will be seen that the principal clause of the said exemption  notification  ’exempts  raw  rubber,  natural  or synthetic  rubber,  latex, natural or synthetic ......"  The principal  clause of the said notification, therefore, makes a  distinction  between  rubber, natural or  synthetic,  and latex, natural or synthetic.  Bearing this in mind, one has to  read  clause 1A of the ?aid notification.  It says  that

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the  said notification shall not apply to "styrene butadiene rubber  and  oil  extended  styrene  butadiene  rubber."  it covers,  therefore,  the  rubber  but not  the  latex.   Our attent-on  was drawn by learned counsel for the appellant to item  40.02 of the Schedule contained in Customs Tariff Act, 1975  where  styrene  butadiene rubber is  shown  under  two sub-heads,  ’Latex’ and ’Others’, and it was submitted  that the styrene butadiene rubber referred to in clause 1A of the said  notification  should,  therefore,   also  be  read  as covering  latex.   For  the  reason  that  we  have  already .stated, we cannot agree.

     Clause 1A of the said notification is in the nature of an  exception  to the principal clause thereof and  must  be construed  with regard to that principal clause.   Secondly, as  has been rightly pointed out by learned counsel for  the assessee,  clause 1A is applicable not to styrene  butadiene generally  but  to  two  categories  of  styrene  butadiene, namely,  styrene  butadiene rubber and oil extended  styrene butadiene rubber.

     For  these  reasons,  we are of the opinion  that  the Tribunal  is right in’ the view that it took.  The appeal is dismissed.  No order as to costs.