In re MRF Limited (CAAR Mumbai)
a. Compounded rubber formulation 1 (with less than 5 parts of Carbon Black) mentioned in para 5.1 merits classification under CTH 4005 1000 Compounded rubber, unvulcanised, in primary forms or in plates, sheets or strip – compounded with carbon black or silica and is eligible for duty exemption benefit under serial number 503 of the notification 46/2011-Cus. dated 1.6.2011 amended from time to time subject to the fulfilment of conditions of the said notification as well as notification notification 189/2009-Cus. (N.T.) dated 31.12.2009 amended from time to time,
b. Compounded rubber formulation 2 (without Carbon Black but with less than 5 parts of SBR -Styrene butadiene rubber) mentioned in para 5.1 merits classification under CTH 4005 99 90 Compounded rubber, unvulcanised, in primary forms or in plates, sheets or strip —Other and is eligible for duty exemption benefit under serial number 504 of the notification 46/2011-Cus. dated 1.6.2011 amended from time to time subject to the fulfilment of conditions of the said notification as well as notification 189/2009-Cus. (N.T.) dated 31.12.2009 amended from time to time.
c. Compounded rubber formulation 3 (without Carbon Black but with less than 5 parts of clay) mentioned in para 5.1 merits classification under CTH 4005 99 90 Compounded rubber, unvulcanised, in primary forms or in plates, sheets or strip —Other and is eligible for duty exemption benefit under serial number 504 of the notification 46/2011-Cus. dated 1.6.2011 amended from time to time subject to the fulfilment of conditions of the said notification as well as notification 189/2009-Cus. (N.T.) dated 31.12.2009 amended from time to time.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
M/s MRF Ltd. (hereinafter referred to as ‘the applicant’) filed four applications for advance ruling before the Customs Authority for Advance Ruling, Mumbai (CAAR) under the provisions of Section 28 H 2 (a) & (b) of the Customs Act, 1962. The said applications, along with enclosures, were received in the secretariat of CAAR, Mumbai on 03.01.2023, in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’). The applicant is seeking advance rulings on the classification of Compounded Rubber under CTH 4005 1000.
2. The Applicant is a regular importer of raw materials needed in the manufacture of tyres and clearing tyres for domestic market and also export tyre to other countries following due process of law applicable for import, manufacture and clearance.
2.1 Applicant proposes to import approximate quantity of 72,000 Tonnes per annum compounded rubber from the suppliers in Thailand, Malaysia, Indonesia, Vietnam and through Chennai Port, Kattupalli Port, Ennore Port, Nhava Sheva Port, Cochin Port and Hazira Port and has sought the Ruling under Section-28(H) 2(a) of Customs Act, 1962 for the import of compounded rubber with Carbon Black or Silica or Styrene Butadiene Rubber (SBR) which is specifically covered under tariff heading 4005 10 00. It is submitted that there is no issue of import license for import of compound rubber with carbon black or silicon classified under CTH 4005 1000. It is also submitted that there is no issue relating to Import Policy Classification under Customs Tariff currently pending or already decided by the department or in the appellate forum. However, in order to obtain certainty in the customs rate of duty, the Applicant is seeking classification from Customs Authority for Advance Ruling on future import of
I. compounded rubber with less than 5 parts of carbon black. (or)
II. compounded rubber without carbon black but with less than 5 parts of SBR (Styrene Butadiene Rubber). (or)
III. compounded rubber without carbon black but with less than 5 parts of clay, appropriately classifiable under CTH 4005 1000.
IV. The Applicant also claims Nil rate of duty vide Sr. No. 503 of Notification 41/2019 dated 31-12-2019 as amended, issued under sub-section 1 of section 25 of Customs Act, 1962.
2.2 Earlier the applicant had imported compound rubber through B/E No. 5498937 dt. 18/09/2021 and got the sample tested in Customs Lab which had stated that sample is in the form of black coloured soft lumps of irregular shape and size and that it was composed of compound rubber. The bill of entry was assessed under CTH 4005 10 00 applying Notification benefit under Notification 41/2019 dated 31/12/2019 (46/2011) as amended. Though the applicant did not face any problem on import of a sample consignment of compound rubber through Chennai Customs, the applicant intends to import substantially large consignments of compound rubber through multiple ports in the above stated category so as to increase applicant’s manufacturing activities. In order to safeguard the interest of applicant and to avoid dispute, ruling is sought from the Customs Authority for Advance Ruling under section 28(H) 2(a) and (b) of Act.
3. The applicant further submits that they would fulfil the conditions prescribed under the said notification. The Certificate of Origin required for availing the benefit of the Notification would be obtained at the time of import and the same would be kept ready at the time of clearance of the subject goods. Conditions prescribed under notification 189/2009-Cus. (N.T.) dated 31.12.2009 would be followed by the applicant. Applicant’s interpretation of law and facts are as follows:
1. The classification of imported goods is governed by Customs Tariff Act 1975. The first Schedule specifies nomenclature that is based on the Harmonised Commodity description. The pattern of arrangement of goods in the Tariff is in increasing degree of manufacture of commodities/ products in the sequence of natural products, raw material, semi-finished goods and fully finished goods/ articles machinery etc. the section Notes explains group of chapters. The chapter consist of Chapter Notes, brief description of commodities arranged at four-digit, six-digit and eight-digit level. Every four-digit level is heading, six-digit is called sub heading, and eight-digit is called tariff item. India has developed eight-digit code. The process of arriving at a particular heading or sub heading either at four-digit, six-digit or eight level for a commodity in the tariff schedule is called classification. The title, sections, chapters and sub chapter are Kovicied for ease of reference only.
2. Gene of Interpretative five Rules are a set of 6 rules for classification goods in the tariff hese riffeN1% to be applied in sequential manner.
