Classification of natural rubber products: processing that preserves the same commodity does not change its tax character.

Imported and sold goods described in invoices as raw rubber, natural rubber or crude natural rubber were held to fall under entry 74 of the Tamil Nadu General Sales Tax Act, not as rubber products under entry 126. The court accepted the Tribunal's factual finding that latex is the milky substance from rubber trees and that sheet rubber is only a marketable form produced by coagulation, rolling, drying and grading. Because the processing did not create a new commodity and there was no evidence that the assessee converted the goods into other products, the goods retained their original character and remained assessable as raw or natural rubber.

---

---

Issues: Whether the goods imported and sold by the assessee were raw rubber or natural rubber latex falling under entry 74 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, or rubber products falling under entry 126 and taxable as general goods under section 3(1) of that Act.

Analysis: The goods were described in the invoices and supporting documents as raw rubber, natural rubber or crude natural rubber. The materials showed that latex is the milky substance obtained from rubber trees and that sheet rubber is only the common marketable form of latex after coagulation, rolling, drying and grading. The processing described did not show conversion into a new commodity. No material was produced by the Revenue to establish that the assessee had converted the imported rubber into other products. The factual finding of the Tribunal was therefore supported by the record, and the view taken by the Tribunal was consistent with the principle that processing which preserves the same commodity and renders it marketable does not alter its character.

Conclusion: The goods were correctly classified as raw rubber or natural rubber falling under entry 74, and not as rubber products under entry 126. The questions of law were answered in favour of the assessee and against the Revenue.

---