Unhardened vulcanised rubber goods are classifiable under Heading 40.16, not Chapter 84 machinery parts, and related penalties fail.

Articles manufactured from unhardened vulcanised rubber are excluded from Section XVI by the relevant section note, so they are classifiable under Tariff Heading 40.16 rather than as machinery parts under Chapter 84. Applying the controlling precedent, the classification claimed for the rubber goods was accepted. Once that classification was accepted, the basis for alleging misdeclaration or suppression fell away, and the consequential demand of differential duty and the penalties imposed could not be sustained.

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Issues: Whether articles manufactured from unhardened vulcanised rubber were classifiable under Chapter 84 as parts of machinery or under Tariff Heading 40.16 as claimed by the assessee, and whether the demand of duty and penalties could be sustained.

Analysis: The products were admittedly made from unhardened vulcanised rubber. Chapter 84 falls in Section XVI, and Section Note 1(a) excludes articles of unhardened vulcanised rubber from that Section. On the controlling precedent relied upon, such goods are appropriately classifiable under Tariff Heading 40.16 and not as machinery parts under Chapter 84. Once the classification claimed by the assessee is accepted, the foundation for alleging misdeclaration or suppression disappears, and the consequential demand of differential duty and the penalties imposed cannot survive.

Conclusion: The goods were classifiable under Tariff Heading 40.16, not under Chapter 84, and the assessee was not liable to differential duty or penalty.

Ratio Decidendi: Where goods are made of unhardened vulcanised rubber and are excluded from Section XVI by the relevant section note, they are classifiable under Heading 40.16 and consequential demands and penalties based on a contrary classification are unsustainable.

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