Inclusive definition of rubber sustains cess on scrap rubber, with no Article 14 discrimination shown.

An inclusive statutory definition of "rubber" was held to cover scrap rubber, making it liable to cess under the Act. For assessment, milling waste was not required to be deducted from scrap rubber because the levy applied to the quantity acquired for manufacture, and the dry rubber content concept was not treated as applicable to scrap rubber. The challenge under Article 14 also failed: the distinction between latex and other forms of rubber had a rational basis, and no hostile discrimination was shown. The levy and assessments were therefore sustained, and no relief was granted.

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Issues: (i) whether scrap rubber is covered by the statutory definition of rubber and is liable to cess under the Act; (ii) whether, in assessing cess on scrap rubber acquired by a manufacturer, milling waste is required to be excluded and only crepe rubber weight taken; (iii) whether the levy and assessment offend Article 14 on the ground of discrimination.

Issue (i): whether scrap rubber is covered by the statutory definition of rubber and is liable to cess under the Act.

Analysis: The definition of rubber in the Act is an inclusive one and expressly takes in scrap rubber. The expression is not confined to the enumerated forms of rubber in the main part of the definition. Scrap rubber is treated as a form of rubber produced in India for the purposes of levy, and the statutory scheme authorises cess on all rubber so produced.

Conclusion: Scrap rubber is rubber within the meaning of the Act and is liable to cess.

Issue (ii): whether, in assessing cess on scrap rubber acquired by a manufacturer, milling waste is required to be excluded and only crepe rubber weight taken.

Analysis: The statutory and regulatory scheme permits assessment on the quantity acquired for manufacture, and acquisition for manufacturing use amounts to use within the meaning of the levy provisions. The concept of dry rubber content is technically apt to latex, not to scrap rubber. The Court found no basis to treat milling waste as deductible for scrap rubber so as to confine the levy only to the net crepe rubber obtained after processing by third parties.

Conclusion: Milling waste is not required to be deducted from scrap rubber for cess assessment purposes.

Issue (iii): whether the levy and assessment offend Article 14 on the ground of discrimination.

Analysis: The classification between latex and other forms of rubber has a rational basis because latex contains substantial water content whereas scrap rubber is predominantly dry rubber. The levy is a specific duty and some inequality in burden does not by itself make the provision arbitrary. No material was produced to establish hostile discrimination in the alleged differential treatment of another assessee.

Conclusion: The levy and assessment do not violate Article 14.

Final Conclusion: The statutory levy on scrap rubber was upheld, the challenge to the assessments failed, and the petitioner obtained no relief.

Ratio Decidendi: Where a fiscal statute expressly includes a commodity within an inclusive definition, the levy applies to that commodity as such, and a rational classification based on the commodity's inherent characteristics will not violate Article 14 merely because the levy is calculated on gross weight rather than on an estimated net content.

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