Classification of lactose under Heading 1702.19 barred exemption under the specified countervailing duty notification.

Lactose BP/USP was treated as falling under Heading 1702.19 because Chapter Note 1(b) places lactose in Chapter 17 and Heading 1702.19 expressly covers chemically pure lactose and other sugars in any form, while Heading 2940.00 excludes lactose. Applying Rule 1 of the Rules for Interpretation and the principle that the more specific description prevails under Rule 3(a), the classification under Heading 1702.19 was upheld. Because Notification No. 31/88-C.E. granted countervailing duty relief only to goods under Chapters 28, 29 or 30, the exemption claim was rejected.

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Issues: Whether Lactose BP/USP was correctly classified under Heading 1702.19 of the Customs Tariff Act, 1985, and whether, on that basis, the appellants were entitled to the benefit of Notification No. 31/88-C.E. dated 01-03-1988 for countervailing duty.

Analysis: Lactose was specifically included in Chapter 17 by Chapter Note 1(b) and by Heading 1702.19, which expressly covers chemically pure lactose and other sugars in any form. Heading 2940.00, on the other hand, specifically excludes lactose. Applying Rule 1 of the Rules for Interpretation of the Schedule and the principle that the more specific description prevails under Rule 3(a), the classification under Heading 1702.19 was held to be correct. Since Notification No. 31/88-C.E. extended the concession only to goods falling under Chapters 28, 29 or 30, an article classified under Heading 1702.19 could not qualify for the exemption.

Conclusion: The classification adopted by the lower authorities was upheld, and the claim for exemption under Notification No. 31/88-C.E. was rejected.

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