Rubber Mixture Classifiable Under 40028090 Due to Absence of Prohibited Additives: CAAR Mumbai

In re Mrf Limited (CAAR Mumbai)

The Customs Authority for Advance Rulings, Mumbai examined an application seeking clarity on the classification and exemption eligibility of imported mixtures of rubber. The applicant proposed to import mixtures of natural rubber (Heading 4001) and synthetic rubber (Heading 4002) in primary form, through multiple ports, and sought confirmation that such goods fall under tariff item 4002 80 90 and qualify for exemption under Serial No. 501 of Notification No. 46/2011-Cus.

The application was admitted as it involved determination of classification and applicability of exemption under the Customs Act, 1962, and no dispute on the issue was pending before any authority. The ruling considered the Customs Tariff Act, 1975, the General Rules for Interpretation (GRI), Chapter Notes, and relevant exemption notifications.

Under the tariff structure, Heading 4002 covers synthetic rubber and mixtures of products of Heading 4001 with products of Heading 4002. Sub-heading 400280 specifically includes mixtures of natural and synthetic rubber, and tariff item 4002 80 90 applies to such mixtures when not otherwise specified. Based on the description provided, the goods are mixtures in primary form and fall within this tariff entry.

The determination of classification depends significantly on Chapter Note 5 to Chapter 40. Note 5(A) excludes mixtures containing substances such as vulcanising agents, fillers, plasticisers, and similar compounding agents. Note 5(B), however, permits certain limited additives, provided the goods retain their essential character as raw rubber. The applicant stated that the goods would not contain any substances prohibited under Note 5(A) and would only include permissible additives under Note 5(B), ensuring that the essential character of raw rubber is maintained.

The ruling also referred to a judicial decision emphasizing that classification of rubber products is based on the “composition test” rather than end-use, with the key factor being whether the product retains the essential character of rubber as a raw material. Applying this principle, the authority observed that mixtures of natural and synthetic rubber in primary form, without prohibited additives, satisfy the criteria for classification under Heading 4002.

The authority distinguished the subject goods from compounded rubber under Heading 4005, which involves the addition of compounding agents that significantly alter the nature of rubber. Since the applicant’s goods do not contain such substances and remain unvulcanised mixtures, they do not fall under Heading 4005.

Based on tariff provisions, Chapter Notes, and Harmonised System of Nomenclature (HSN) explanatory notes, the authority concluded that the goods are classifiable under tariff item 4002 80 90. However, this classification is subject to verification of the actual composition of the goods at the time of import through examination, testing, and review of supporting documents.

Regarding exemption, Notification No. 46/2011-Cus provides a concessional rate of duty for goods falling under tariff items 400280 to 400299, subject to compliance with Rules of Origin under Notification No. 189/2009-Cus (N.T.). The applicant proposed to import goods from eligible countries and produce valid Certificates of Origin.

The authority clarified that exemption under the notification is conditional and not automatic. It is available only upon fulfilment of prescribed conditions, including production of a valid Certificate of Origin, satisfaction of Rules of Origin requirements, and verification by customs authorities at the time of import. Correct classification under tariff item 4002 80 90 is also necessary for availing the benefit.

In conclusion, the authority held that mixtures of natural and synthetic rubber in primary form, without prohibited additives and retaining the essential character of raw rubber, are classifiable under tariff item 4002 80 90. Such goods are eligible for exemption under Serial No. 501 of Notification No. 46/2011-Cus, subject to compliance with Rules of Origin and verification by customs authorities at the time of import.

FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI

M/s MRF Ltd (having IEC No. 0488001391) (hereinafter referred to as ‘the applicant), in short) filed application (CAAR-1) for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR in short). The said application was received in the secretariat of the CAAR, Mumbai on 02.02.2026 along with enclosures in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’ also).

2. Applicant proposes to import similar mixture of rubber regularly from the manufacturer in Indonesia and import through Chennai, Nhava Sheva and Hazira and Port. Applicant has sought approval of classification of mixture of rubber falling under CTH 40028090 and has also sought clarification regarding exemption benefit under S No 501 of notification 46/2011 dated 01.06.2011 before the Customs Authority for Advance Ruling, Mumbai respectively in terms of section 28 (H) 2 (a) and 28 11 (2) (b) of the Act.

Submission by Applicant-

3.1 M/s MRF Ltd is a company incorporated in India under the provisions of Company Act 1956 (2013) having its registered office located at No 114(124 old) Greams Road, Chennai, Tamil Nadu 600 006. The Applicant is involved in manufacturing activity of tyre and selling in India as well as abroad.

3.2 Applicant proposes to import mixture of rubber from the manufacturer in Indonesia or other countries listed under Appendix I of notification 46/2011 dated 01.06.2011 and import through Chennai, Nhava Sheva and Hazira Customs/ Ports. Applicant has sought approval of clarification regarding classification of mixture of rubber falling under CTH 40028090 and exemption benefit under S No 501 (1) of notification 46/2011 dated 01.06.2011 before the Customs Authority for Advance Ruling, Mumbai respectively in terms of section 28 (11) 2 (a) and 28 II (2) (b) of the Act. In connection with Notification benefit under 46/2011 S no 501 Country of Origin Certificate in terms of N T Not 189/2009 is also attached in support of notification benefit.

3.3. The Applicant intends to import mixture of rubber through multiple ports. It is submitted that there is no issue of import licence for import of mixed rubber classified under CTH 40028090. It may be noted that the applicant has recently imported mixture of rubber through Chennai Customs. The applicant had voluntarily asked for open order to verify description and manufacturer analytical certificate to ascertain the correctness of classification before release of goods. In addition, applicant had voluntarily taken the sample from the consignment and got it tested in the Customs Lab for the interest of the Applicant. The consignment of mixed rubber falling under 40028090 imported through Chennai port has also been cleared through Chennai Customs without payment of basic customs duty in terms of FTA Notification 46/2011 S no 501 vide ex-bond bill of entry no 6711313 dtd 05-01­2026. Though the said bill of entry could have been cleared without examination of cargo, the Applicant deliberately had asked for open order and verify the technical /manufacturer analytical certificate and Country of Origin Certificate before clearance of goods. After verification of manufacturer analytical certificate and based on examination report, the cargo vi^–z mixture rubber was allowed without payment of basic customs duty in terms FTA notification 46/2011 sr. no. 501 classified under CTH 40028090.

3.4 At present, there is no issue pending in the Customs or in any other Appellate forum on this issue. However, in order to smooth import through other port as mentioned in CAAR Application, the Applicant has sought for approval of Classification and notification benefit sought for import of mixture of rubber, which was already imported and cleared though Chennai Customs. The purpose of seeking classification approval and FTA Notification benefit sought from Customs Authority for Advance Rulings on import of mixed rubber falling under 40028090 is to obtain certainty in customs rate of duty without any dispute. The applicant is seeking classification and ETA Notification benefit approval from Customs Authority for Advance Ruling on future import of:

i) mixture/mixed rubber of natural rubber falling under heading 4001 and synthetic rubber falling under 4002

ii) in the mixed rubber, percentage of Natural rubber and synthetic rubber may vary.

iii) mixed rubber there will not be any specific % of natural rubber or synthetic rubber as there is no condition provided in the customs tariff.

iv) the exclusion of substances provided in Note 5A of Chapter 40 will be maintained

v) Mixture of rubber based on COO Certificate in terms of Notification 46/2011 sr. no. 501 Not. r/w 189/2009 (NT)

3.5 The classification sought for import of mixed rubber under heading 40028090 is in terms of I ISN Explanatory Notes and Section Notes and Chapter Notes of Chapter 40. Though the applicant had imported one consignment vide bill of entry no 6711313 dt 05-01-2026 and cleared through Chennai Customs without any difficulty based on the analysis of manufacturer Analytical Certificate and country of origin certificate in terms of FTA Notification 46/2011 s no 501, the Applicant intends to import of similar goods in future through other ports without any difficulty if the Applicant obtains approval from CAAR Mumbai. Therefore, this application is being filed before the CAAR Mumbai for smooth import of raw material for running of manufacturing activity in the Applicant factory located in different parts of India. By applying an application for obtaining classification and ETA benefit approval from CAAR after following due process of law, the purpose of establishing CAAR will be achieved by the government.

3.6 The applicant also submitted that the Supplier (MRF SINGAPORE) and the (importer MRF LTD CHENNAI) the Applicant are related person. However, on examining the submitted documents, SVB Chennai IIl Commissionerate has recommended to accept the transaction value under Rule 3 (3) (a) of CVR 2007 vide SVB Order no 102/2018 dated 11-12-2018.

3.7 As per the applicant the subject goods i.e mixture of rubber classifiable under 40028090 and are eligible for exemption under FTA notification 46/2011 dated 01.06.2011 under sr. no 501 in case of the imports made from the countries Annexed to the said notification:

4. Applicants’ interpretation of Law as per applicant:

4.1 The classification of imported goods is governed by Customs Tariff Act 1975. The first Schedule specifies nomenclature that is based on the I 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.

4.2 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 provided for case of reference only.

4.3 GIR is set of 6 rules for classification goods in the tariff schedule. These rules have to be applied in sequential manner. The Hon’ble Tribunal Mumbai in the case of M/s Viraj Profile Ltd Vs Commissioner of Customs (Preventive) Mumbai reported in 2023 (10) TMI 1260 CESTAT MUMBAI vide para 7 the Hon’ble Tribunal has held that the goods are to be classified taking into consideration the scope of heading/sub-heading related to Section Notes Chapter Notes and General Rules for Interpretation. GIR of 1st Schedule to the Customs Tariff Act 1975. Rule 1 of GIR provides that classification of goods shall be determined according to the terms of heading of the tariff and relative Section or Chapter Notes. In the event of goods cannot be classified solely on the basis of GIR 1, remaining Rule 2 to 6 to be applied.

4.4 In the instant case Chapter Heading 4002 covers mixture of products of heading 4001 with any products of this heading (4002) and sub-heading 400280 covers the same description- mixture of products of heading 4001 with any products of this heading. When the mixture of Rubber is covered under sub heading of 400280 and further tariff item is to be classified under tariff item- 8 digit 40028090 as 40028010 covers latex and 40028020 covers chemically modified natural rubber.

4.5 Therefore, GIR I applies to the present case of import of mixture of rubber. Further Chapter

Notes 5A of Chapter 40 provides some exclusion substances for heading 4002. They are vulcanising agent, accelerators, retarders. pigments, plasticizers, fillers. Whereas Chapter Notes 5B provides some inclusion of emulsifiers, anti tac agents, breakdown products of emulsifiers, heat sensitive agents, cationic surface-active agents, anti-oxidants, coagulants, crumbling agents, freeze resisting agent, peptisers, preservatives, stabilisers, viscosity control agents, or similar purpose additives. The presence of these substances shall not affect its classification in the heading 4001 or 4002 provided mixture of rubber retains its essential character as a raw material. The manufacturer analytical certificate enclosed has confirmed the absence of exclusion substance provided under Note 5 A. the condition provided under Note 5 A will be maintained in the future import of mixture of rubber.

4.6 In addition to the above, HSN notes for Heading 4002 provides for same description of goods- Synthetic rubber, and factice derived from oils, in primary form; mixtures of any product of heading 40.01, with any products of this heading in primary form or plats or sheet HSN HEADING 400280 covers mixture of any products of heading 40.01 with any products of this heading. Hence both HSN Notes and Chapter Note, Tariff heading, sub heading confirm that the mixture of rubber is classified under CTI-I 40028090. Manufacturer analytical certificate has also confirmed that the goods imported under the bill of entry no 6711313 dt 05-01-2026 and correctly classified under heading 40028090 and cleared by Chennai customs under FTA notification under 46/2011 s no 501 without payment of basic customs duty.

4.6 It is submitted that the similar imports of mixture of rubber would be imported from different manufacturer in Indonesia or other countries listed under Appendix I of notification 46/2011 dated 01.06.2011 following the condition provided under Note 5 A of Chapter 40 and the concession provided under FTA Notification 46/2011. It is prayed that the classification and FTA notification benefit approval sought for mixture of rubber, classifiable under CTI I 40028090 may be granted based on the legal guidance provided under Customs Tariff act 1975, General Interpretative Rules. Section Notes, Chapter Notes and HSN Explanatory Notes and the factual evidence viz analysis certificate provided by the manufacturer, Country of Origin Certificate to be produced by the applicant at the time of import under Not 189/2009 (N T).

5. Port of Import and reply from jurisdictional Commissionerate:

5.1 The applicant, in their CAAR-1 application, indicated that they intend to import the subject goods through the jurisdiction of the O/o the Commissioner of Customs, Chennai—II (Import), Nhava Sheva—I, and Hazira. Accordingly, the application was forwarded for comments to the jurisdictional authorities, namely:

(i) O/o the Commissioner of Customs, Chennai—II (Import), on 13.02.2026, 02.03.2026, 20.03.2026, and 10.04.2026;

(ii) O/o the Commissioner of Customs, Nhava Sheva—1, Jawaharlal Nehru Customs House, on 13.02.2026, 02.03.2026, 20.03.2026, and 09.04.2026; and

(iii) O/o the Principal Commissioner of Customs, Hazira, on 16.02.2026, 12.03.2026, and 02.04.2026.

Comments have been received from the jurisdictional authority at Hazira vide their letter dated 10.04.2026. However, no comments were received from the jurisdictional authorities of Chennai—I I (Import) and Nhava Sheva—I, Jawaharlal Nehru Customs House.

5.2 The said Commissionerate of Hazira has furnished its comments vide letter dated 09.04.2026, submitted as follows:

(a) No case is pending in respect of the applicant at Hazira Port, Surat.

(b) No issue involved in the present application has been decided in the applicant’s own case by the Appellate Tribunal or any court.

5.2, Further, with regard to comments on the merits of the question on which the advance ruling is sought, it has been submitted as under:

The Hon’ble Supreme Court Of India in case of M/s Mannampalakkal Rubber Latex Works reported in 2007 (217) E.L.T. 161 (S.C.) has relied on the Chapter Notes and rendered the following decision. (relevant excerpts reproduced)

“5(b) 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 essential character as a raw material,:

(i) emulsifiers or anti-tack agents;.

(ii) small amounts of breakdown products of emulsifiers;

(iii) very small amounts of the following:

heat-sensitive agents (generally for obtaining thermosensitive rubber latexes), cationic surface-active agents (generally for obtaining electropositive rubber latexes), antioxidants, coagulants, crumbling agents, freeze-resisting agents, peptisers, preservatives, stabilisers, viscosity-control agents or similar special purpose additives.

6. Reading Note 5(b), it becomes clear that the test to distinguish rubber based adhesives and non-rubber based adhesives or other adhesives is the test of composition and not the test of end-user. Generally, in matters of classification “composition test” is an important test and “end-user test” would apply only if the entry say so. Applying Note 5(b) and keeping in mind the distinction between rubber adhesive and other adhesives., we are of the view that tartly heading ‘40.01’ is applicable to the ,facts of the present case. Applying the composition test, we also find that the rubber content in the product in question is above 90 per cent.”

5.3 It has further been submitted that, in view of the above, it emanates that, subject to the presence of the substances enumerated under clauses (i), (ii) and (iii) above, and provided the essential character of the goods as a raw material is retained, the classification of the goods in question appears to be in order.

6. Details of Personal Hearing:

Shri Ram kumar Authorized Representative, appeared for PH on behalf of the applicant in the case. He reiterated the contention filed with the application that the subject import goods are intermixture of Natural rubber and synthetic Rubber and that CTH 4002 specifically covers the said goods i.e. mixture of any product of heading 4001 with any products of this heading (4002) in primary forms or in plates, sheets or strip. That their product does not fall under category of Chapter Note 5A of chapter 40 and Chapter Note 5B is applicable in their case. He contended that the subject goods merit classification under CTI4 4002 and more specifically under CTI-400280.

He further claimed that the subject goods is eligible for FTA exemption under Notification 46/2011 Sr. No. 501. That the applicable conditions to be fulfilled is the terms of Notification-189/2009 pertaining to the Rules of origin.

Nobody appeared for PH from the department side.

DISCUSSION AND FINDINGS

7.1 Admissibility and Scope of the Application

7.1.1 I have carefully considered the application filed in Form CAAR-1, the supporting documents placed on record, the submissions made during the course of personal hearing, and the comments furnished by the jurisdictional Commissionerate of Hazira. The ruling is being pronounced on the basis of the facts available on record and the applicable legal provisions, including the Customs Tariff Act, 1975, the General Rules for Interpretation (GRI), relevant Chapter Notes, and the exemption notifications in force.

7.1.2 At the outset, I find that the questions raised in the application fall squarely within the ambit of Section 28I1(2)(a) and 281-1(2)(b) of the Customs Act, 1962, as they pertain to

(i) the determination of the correct classification of the subject goods, namely “mixture of rubber”, under the Customs Tariff Act, 1975, and

(ii) the applicability of exemption under Serial No. 501 of notification 46/2011 dated 01.06.2011 Further, based on the declarations made and the records available,

I find that applicant has categorically submitted that the issue under consideration is not pending in the applicant’s case before any Customs authority, Appellate Tribunal, or Court. Accordingly, the application is admitted for consideration on merits.

7.1.3 Before proceeding to examine the issues involved, it is necessary to outline the relevant legal framework governing classification under the Customs Tariff Act, 1975. As per Rule 1 of the General Rules for Interpretation, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes, the titles of Sections and Chapters being provided only for ease of reference. Rules 2 to 6 of the GRI provide supplementary principles to be applied sequentially where classification cannot be determined solely on the basis of Rule 1.

7.1.4 The scope of the present application is confined to (i) the classification “mixture of rubber”, comprising natural rubber (Heading 4001) and synthetic rubber (Heading 4002), Proposed to be imported in primary form, and (ii) the eligibility of such goods for exemption under Serial No. 501 of notification 46/2011 dated 01.06.2011, subject to fulfilment of the applicable Rules of Origin under Notification No. 1.89/2009-Cus (N.T.).

7.1.5 The applicant has submitted that the proportion of natural and synthetic rubber in the Subject goods may vary; however, the goods will not contain any substances excluded under Note 5(A) to Chapter 40, though permissible additives under Note 5(13), if arm, may be present. It is further stated that the goods will retain the essential character of raw rubber in primary form.

7.2 The relevant tariff heading and entries:

7.2.1 The relevant tariff entries are reproduced below for ease of reference:

7.2.2 A plain reading of the above tariff entries clearly indicates that mixtures of natural rubber (falling under heading 4001) with synthetic rubber (falling under heading 4002), when presented in primary forms or in plates, sheets or strip, are specifically covered under sub-heading 4002 80. Such mixtures, when not more specifically enumerated, fall under tariff item 4002 80 90.

7.2.3 In the present case, as submitted by the applicant, the subject goods are mixtures of natural rubber and synthetic rubber in primary form, with variable proportions, and are stated to be devoid of substances excluded under Note 5(A) to Chapter 40, thereby retaining the essential character of raw, unvulcanised rubber. The applicant has further contended that the presence of zinc oxide and stearic acid, if any, is not in the capacity of vulcanising agents or active agents.

7.3 Applicability of Chapter Notes to Chapter 40

7.3.1 Chapter Note 5(A)& I3(B) to Chapter 40 is crucial in determining the classification of rubber and mixtures thereof under Headings 4001 and 4002. The said Note provides for both exclusion and inclusion criteria, which arc reproduced below for clarity:

5. (A) Headings 4001 and 4002 do not apply to any rubber or mixture of rubbers which has been compounded, before or after coagulation, with:

(i) vulcanising agents, accelerators, retarders or activators (other than those added for the preparation of pre-vulcanised rubber latex);

(ii) pigments or other colouring matter, other than those added solely for the purpose of identification;

(iii) plasticisers or extenders (except mineral oil in the case of oil-extended rubber), fillers, reinforcing agents, organic solvents or any other substances, except those permitted under (b);

5(B) the presence of the following substances in any rubber or mixture of rubbers shall not affect its classification in heading 4001 or 4002, as the case may be, provided that such rubber or mixture of rubbers retains its essential character as a raw material :

(i) emulsifiers or anti-tack agents;

(ii) small amounts of breakdown products of emulsifiers;

(ii) very small amounts of the following: ) heat-sensitive agents (generally for obtaining thermosensitive rubber latexes), cationic surface-active agents (generally for obtaining electropositive rubber latexes), anti-oxidants, coagulants, crumbling agents, freeze- resisting agents, peptisers, preservatives, stabilisers, viscosity-control agents, or similar special-purpose additives.

7.3.2 A conjoint reading of Note 5(A) and 5(B) makes it evident that while the addition of certain specified substances would exclude the goods from classification under Headings 4001 and 4002, the presence of limited and specified additives, as enumerated under Note 5(B), would not alter such classification, provided the goods retain their essential character as raw rubber.

7.3.3 In the present case, the applicant has categorically submitted that the subject goods, namely mixtures of natural and synthetic rubber, shall not contain any of the substances specified under Note 5(A). It has further been stated that any additives, if present, would be limited to those permissible under Note 5(B), and that the goods would retain their essential character as raw rubber.

7.3.4 The Hon’ble Supreme Court, in the case of M/s Mannampalakkal Rubber Latex Works [2007 (217) E.L.T. 161 (S.C.)1, has held that classification of rubber products is to be determined primarily on the basis of the composition test, and that the determining factor is whether the product retains the essential character of rubber as a raw material. The jurisdictional Commissionerate has also relied upon the said judgment in its comments.

7.3.5 Applying the above statutory provisions and judicial principles to the facts of the present case, I find that where the goods consist of mixtures of natural rubber and synthetic rubber in primary form, do not contain prohibited substances under Note 5(A), and retain the essential character as raw rubber in primary form.

7.3.6 Further, the above conclusion is reinforced by the Harmonised System of Nomenclature (I ISN) Explanatory Notes to Heading 4002, which explicitly provide that the said heading covers mixtures of any product of Heading 4001 with any product of Heading 4002 in primary forms or in plates, sheets or strip. Thus, both the statutory provisions of the Customs Tariff and the I ISN Explanatory Notes are in consonance in covering the subject goods under Heading 4002, more specifically under sub-heading 400280. rubber, such goods merit classification under Heading 4002 of the Customs Tariff.

7.4 Distinction from Compounded Rubber (Heading 4005)

9.4.1 I observe that Heading 4005 covers compounded rubber, unvulcanised, which typically contains compounding agents such as carbon black, silica, fillers, plasticizers, and other similar substances that materially alter the physical and chemical characteristics of the base rubber, thereby extending beyond a mere physical mixture.

9.4.2 In contrast, as per the submissions of the applicant, the subject goods comprise mixtures of natural rubber falling under I leading 4001 and synthetic rubber falling under I leading 4002, without the addition of any compounding agents of the nature specified under Chapter Note 5(A) of Chapter 40. It has further been submitted by the applicant that the goods retain their essential character as rubber in primary form.

9.4.3 In view of the foregoing, the applicant has submitted that the subject goods do not contain any of the substances specified in Note 5(A) to Chapter 40. The said Note, inter alia, provides for the exclusion of products containing certain added substances such as fillers, reinforcing agents (cg carbon black, silica), plasticisers, or other compounding ingredients, which would render the goods classifiable as compounded rubber under Heading 4005. Accordingly, the exclusion clause embodied therein is not attracted.

In such circumstances, the classification of the subject goods under Heading 4002 is found to be appropriate, and more specifically under tariff item 4002 80 90, having regard to the relevant Section Notes, Chapter Notes, and the HSN Explanatory Notes. However, the said classification shall be subject to verification of the actual composition of the goods, including by way of testing, wherever considered necessary, by the proper officer at the time of import.

7.5. Requirement of Factual Verification

7.5.1 It is, however, pertinent to note that the classification of the subject goods is contingent upon the actual composition and nature of the imported goods at the time of clearance.

7.5.2 Accordingly, the jurisdictional Customs authorities, at the time of import, may undertake examination of the goods, verification of the manufacturer’s analytical certificate, and chemical testing, wherever considered necessary, so as to ascertain compliance with Chapter Note 5(A) of Chapter 40 and to confirm that the goods retain the essential character of raw rubber and is not compound or vulcanized .

7.6 Eligibility for Exemption under Notification No. 46/2011-Cus

7.6.1 As discussed above, the subject goods, i.e. mixtures of natural rubber falling under Heading 4001 and synthetic rubber falling under Heading 4002, classifiable under MI 40028090, are also proposed for assessment under Serial No. 501 of Notification No. 46/2011-Cus dated 01.06.2011, which provides concessional rate of duty under the ASEAN-India Free Trade Agreement (AIFTA). The relevant extract of the said notification is reproduced below:

……………

December, 2009 1G.S.R. 944 (E), dated the 3P’ December, 2009], except as respects things done or omitted to be done before such supersession, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description as specified in column (3) of the Table appended hereto and falling under the Chapter, Heading, Sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as specified in the corresponding entry in column (2) of the said Table, from so much of the duty of customs leviable thereon as is in excess of the amount calculated at the rate specified in,-

7.6.2 The benefit of the said notification is subject to fulfilment of the conditions prescribed under Notification No. 189/2009-Cus (N.T.) dated 31.12.2009, governing the Rules of Origin.

7.6.3 The applicant has submitted that:

• • the goods shall be imported from countries listed in Appendix I of the said notification;
  • valid Certificates of Origin (COO) shall be produced at the time of import; and
  • all procedural and substantive requirements under the applicable Rules of Origin shall be complied with.

7.6.4 In this regard, it is observed that the exemption under Notification No. 46/2011-Cus is not automatic but conditional in nature, and its admissibility is subject to verification of compliance with the prescribed conditions by the proper officer of the jurisdictional Customs authorities at the time of import.

7.6.5 Accordingly, the benefit of exemption under Serial No. 501 of Notification No. 46/2011-Cus shall be admissible only upon fulfilment of all stipulated conditions, to the satisfaction of the proper officer at the time of import, including, inter alia:

(i) production of a valid Certificate of Origin issued by the competent authority;

(ii) satisfaction of the prescribed Rules of Origin criteria under Notification No. 189/2009-Cus (N.T.); and

(iii) correct classification of the goods under the appropriate tariff entry.

8. To Sum Up

8.1 In view of the foregoing analysis, it emerges that the classification of the subject goods is primarily governed by the specific inclusion of mixtures of natural and synthetic rubber under I leading 4002, read with the provisions of Chapter Note 5 to Chapter 40 and the General Rules for Interpretation. The decisive factor remains whether the goods retain the essential character of raw rubber and do not contain substances excluded under Note 5(A).

8.2 The submissions of the applicant, supported by the statutory provisions, I ISN Explanatory Notes, and judicial precedent, indicate that the subject goods are, in principle, classifiable under tariff item 4002 80 90.

However, such classification is necessarily subject to verification of the actual composition of the goods at the time of import. This includes confirmation that the goods are unvuicanised and do not contain impermissible additives, through appropriate examination, including testing wherever required, as part of the Customs Compliance Verification (CCV) process by the jurisdictional Customs authorities.

8.3 Further, the eligibility for concessional duty under Notification No. 46/2011-Cus dated 01.06.2011 is contingent upon fulfilment of the prescribed conditions.

In particular, this includes compliance with the Rules of Origin under Notification No. 189/2009-Cus (N.T.) dated 31.12.2009. to the satisfaction of the proper officer at the time of import.

9. On the basis of the facts and circumstances of the case, the foregoing discussions and observations, I reach the following conclusions:

(i) The subject goods, namely “mixtures of natural rubber falling under Heading 4001 and synthetic rubber falling under Heading 4002”, in primary form and without the presence of compounding agents excluded under Chapter Note 5(A) to Chapter 40, are classifiable under I leading 4002 of the First Schedule to the Customs Tariff Act, 1975, and more specifically under tariff item 4002 80 90.

(ii) The applicant is eligible for exemption under Serial No. 501 of Notification No. 46/2011-Cus dated 01.06.2011 in respect of the subject goods classified under CTH 4002 80 90; however, such eligibility shall be subject to fulfilment of all conditions stipulated under Notification No. 189/2009-Cus (N.T.) dated 31.12.2009.

This shall, inter alia, include production of a valid Certificate of Origin, satisfaction of the prescribed Rules of Origin criteria, compliance with all procedural and substantive requirements at the time of import, and verification thereof to the satisfaction of the proper officer in accordance with law.

I rule accordingly.