In re Sky Impex (CAAR Mumbai)
Considering the mandate of the Chapter Note 5A, that, headings 4001 and 4002 do not apply to any rubber or mixture of rubbers which has been compounded, before or after coagulation, with vulcanising agents, accelerators, retarders or activators (other than those added for the preparation of pre-vulcanised rubber latex); pigments or other colouring matter, other than those added solely for the purpose of identification; 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); and the fact that from the product literature, it is clear that the product/s under consideration contain at least 20% and up to 40% of materials like silica, carbon black, natural ester wax, and a curative package which is a trade secret of the manufacturer, leads one to the conclusion that heading 40.02 is not an appropriate heading for the group of products sought to be imported. On the other hand, I am inclined to concur with the views of the Commissioner of Customs, Import – II, NCH, Mumbai that heading 40.05, meant specifically for compounded rubber, is a more appropriate choice. Even though, heading 40.05 doesn’t specifically mention synthetic rubber, placing reliance on Chapter Note 1, that the term rubber includes synthetic rubber, it appears to be the correct heading for rubber compounded with silica and carbon black.
In view of the aforementioned discussions, I rule those various grades of synthetic rubber, e.g., HR 62, HR 65, HR 81, HR 84, and HR 495 C, manufactured by Simon Industry Corporation, Taiwan and sought to be imported by the applicant merit classification under heading 40.05, and more specifically, under sub-heading 40051000 of the first schedule to the Customs Tariff Act, 1965.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
M/s. Sky Impex has filed an application dated 06.04.2021, which was received on 15.04.2021, seeking an advance ruling on classification of FKM Synthetic rubber compounds which are in primary form and made of more than 60% of di-polymer of hexafluoropropylene and vinylidene fluoride (CAS No. 9011-17-0), less than 5 % of silica (CAS No. 7631-86-9), less than 15% of trade secret curative package, less than 40 % of carbon black (CAS No. 1333-86-4) and less than 2% of natural ester wax (CAS No. 8015-86-9). The applicant is of the contention that amongst the contending sub-headings of 40029910 or 40029920 or 40029990 or 40059910 or 40051020 or 40059990, the heading 40059910 appears to be more appropriate since the subject goods are compounded with silica or carbon black. Since, the composition of the ingredients as conveyed by the applicant were open ended, the applicant was requested to provide the ranges of each of the constituents in the final products. In reply, the applicant has stated that as per their supplier, M/s. Simon Industry Corporation, Taiwan, the product is high heat resistant rubber compound, and that FKM rubber doesn’t vulcanise with Sulphur and there are other vulcanising agents like Calcium Hydroxide/ Peroxide. As regards composition, they indicated the ranges of di-polymer of hexafluoropropylene and vinylidene fluoride to be in the range of 60-80%, silica in the range of 3-5%, trade secret curative package in the range of 10-15%, carbon black in the range of 6-40%, and natural ester wax in the range of 1-2%. It is also stated that different grades, e.g., HR 62, HR 65, HR 81, HR 84, and HR 495 C have slightly different composition to offer different types of high heat resistant rubber compound having different hardness, tensile strength, flow properties etc. to meet different specifications for different applications like moulding, extrusion, metal bonding etc.
2. The applicant declared that they wish to import the subject goods through the Mumbai port.
Therefore, the application was forwarded to the Commissioner of Customs, Import – H, NCH, Mumbai Customs Zone – I for comments. The comments of the Commissioner have been conveyed vide letter dated 22.06.2021. In the said communication, it is suggested that the sub-heading, 40051000 is more appropriate for the subject goods considering the fact that they appear to have been compounded. The comments of the Commissioner have been conveyed to the applicant. The applicant has communicated that they have nothing further to add.
3. The application was listed for hearing on 01.06.2021. The applicant was represented by S/Sri Kuldeep Singh Nara, advocate and Gautamkumar K. Jhunjhunwala, partner. During the hearing the nature and composition of the synthetic rubber compounds sought to be imported were reiterated and a request was made for an advance ruling so that the classification issue is settled.
4. According to the applicant, rubber is a broad term used to refer to many types of different polymers called as elastomers. Elastomers can be stretched and will return to their original shape. Natural rubber is the original and the first kind of rubber to be used. Other than natural rubber, all the other types of rubber are synthetic or man- made. Synthetic rubber is artificially made from petrochemical feed-stocks. Naphtha, derived from refining of crude oil is the principal raw material for different types of rubber in synthetic category. The naphtha is mixed with natural gas to create monomers such as styrene and isoprene, essential for synthetic rubber manufacture. There are about twenty different types of chemicals used for making different synthetic rubber varieties. Depending on the chemicals added and the properties associated with it, the synthetic rubber can be as hard as a bowling ball or as resilient as a rubber band or as soft as a sponge. Approximately 70% of all rubber used today are synthetic rubber varieties. Some of the popular synthetic rubber types include the following: –
