Latex classification prevails where added substances do not alter product character; mere adhesive description is insufficient.

Mere sale description of latex products as adhesives was insufficient to classify them under Heading 3506. The record did not show that processing at the assessee's premises increased bonding strength so as to displace the existing latex classification. Relying on Note 5 of Chapter 40, the Tribunal found no material to exclude the goods from Heading 40.01 and treated small test-verified additions as non-dispositive where the goods retained their character as latex. In the absence of supporting evidence, the Revenue's challenge to the Commissioner's classification failed, and the goods remained classifiable as latex goods under Heading 40.01.

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Issues: Whether the impugned goods were classifiable under Heading 3506 as prepared adhesives or under Heading 40.01 as latex goods, and whether the Revenue had established any basis to deny the exemption.

Analysis: Mere sale or description of the goods as adhesives was held insufficient to place them under Heading 3506. The record did not show that the processing at the assessee's premises increased the bonding strength of the latex product, which was necessary to displace the earlier classification. The Tribunal also relied on Note 5 of Chapter 40, finding no material to show exclusion from Heading 40.01 and no inconsistency in ignoring small test-verified percentages of added substances when the goods remained classifiable as latex. In the absence of supporting evidence, the Revenue's challenge to the Commissioner's classification failed.

Conclusion: The goods were not classifiable as prepared adhesives under Heading 3506 and were rightly treated as latex goods under Heading 40.01; the Revenue's appeal failed.

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