Concessional sales tax on rubber used in manufacture upheld where finished product was distinct from compound of rubber.

Rubber used in manufacturing a finished rubber product was treated as distinct from a compound of rubber, and the remand record showed the product was not obtained by simple mixing with chemicals but by a manufacturing process. Expert affidavits and certificates supported that distinction, while the State produced no rebuttal evidence of comparable value. On that basis, the assessee qualified for the concessional or reduced sales tax rate on rubber purchased for manufacture, and the exclusion for compound of rubber did not apply.

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Issues: Whether the assessee was entitled to concessional sales tax on rubber used in the manufacture of rubber compound or compound of rubber under the relevant notifications, and whether the product manufactured within the State fell within the exclusion for compound of rubber.

Analysis: The scope of the remand was confined to deciding whether rubber compound and compound of rubber are distinct articles, and the Court received additional evidence accordingly. The evidence placed after remand, including expert affidavits and certificates, showed that the product manufactured by the assessee is a finished rubber product made through a manufacturing process and not merely a product obtained by simple mixing with chemicals or a similar process. The State did not adduce rebuttal evidence of greater evidentiary value. The statutory context under the Rubber Act also supported the distinction between rubber used in manufacture and a manufactured article containing rubber.

Conclusion: The assessee was held entitled to the reduced rate of tax on purchase of rubber used for manufacturing its product, and the State's challenge failed.

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