Rubber latex compounded with accelerators falls outside Tariff Item 40.01, defeating the linked exemption claim.

Rubber latex solution compounded with accelerators and activators falls outside Tariff Item 40.01 because Chapter Note 5(a) excludes rubber or rubber mixtures compounded with vulcanising agents, accelerators or activators. The presence of small quantities of antioxidants or preservatives does not displace that exclusion. On that basis, the product remained classifiable under Tariff Item 40.05. Because the exemption under Notification No. 250/86 applied only to rubber latex falling under Tariff Item 40.01, the exemption was unavailable once the product was excluded from that entry.

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Issues: (i) Whether rubber latex solution containing accelerators and activators was classifiable under Tariff Item 40.01 or Tariff Item 40.05 of the Central Excise Tariff; (ii) Whether the assessee was entitled to the benefit of Notification No. 250/86 dated 11-4-1986.

Issue (i): Whether rubber latex solution containing accelerators and activators was classifiable under Tariff Item 40.01 or Tariff Item 40.05 of the Central Excise Tariff.

Analysis: Chapter Note 5(a) excluded from Tariff Items 40.01 and 40.02 any rubber or mixture of rubbers compounded with vulcanising agents, accelerators or activators. The product admittedly contained accelerators and activators, and the test reports described it as compounded latex solution and later as vulcanised rubber latex. Chapter Note 5(b) regarding small quantities of antioxidants and preservatives did not override the exclusion in Note 5(a). On the material on record, the product could not be brought under Tariff Item 40.01.

Conclusion: The product was not classifiable under Tariff Item 40.01 and the classification under Tariff Item 40.05 stood confirmed, in favour of the Revenue.

Issue (ii): Whether the assessee was entitled to the benefit of Notification No. 250/86 dated 11-4-1986.

Analysis: The exemption applied only to rubber latex in liquid, paste or dispersion form falling under Tariff Item 40.01. Since the product did not fall under Tariff Item 40.01, the exemption could not be availed of.

Conclusion: The assessee was not entitled to the benefit of Notification No. 250/86, in favour of the Revenue.

Final Conclusion: The common appeals failed because the product was correctly treated as falling outside Tariff Item 40.01, with the consequence that the exemption claim also failed.

Ratio Decidendi: Rubber latex solution compounded with accelerators or activators falls outside Tariff Item 40.01, and an exemption linked to that tariff entry cannot be claimed once that exclusion applies.

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