1999 INSC 0932
                                        SUPREME COURT OF INDIA

                                                Collector of Customs

                                                         Versus

                                                  Modi Rubber Ltd.

                           (S.P. Bharucha, R.C. Lahoti and N. Santosh Hedge, JJ)

                                          Civil Appeal No. 451 of 1999

                                                      12.01.1999

JUDGMENT

S.P. Bharucha, J.

         The respondents imported styrene butadiene latex. They claimed for the purposes of
payment of customs duty thereon the benefit of an exemption notification (No. 82/86), as amended
on 2.4.1986. So amended, this is how the said notification read :

                  "In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs
                  Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary
                  in the public interest so to do, hereby exempts raw rubber, natural or synthetic
                  (including mixtures thereof) whether or not pre-vulcanized; balata, gutterperchan and
                  similar natural gums, factice derived from oils, reclaimed rubber, waster and scrap of
                  unhardened rubber, falling within Chapter 40 of the First Schedule to the Customs
                  Tariff act, 1975 (51) of 1975), when imported into India, from so much of that
                  portion of the duty of customs leviable thereon which is specified in the said First
                  Schedule as is in excess of the amount calculated at the rate of 40% ad valorem.

                  1-A. Nothing contained in this notification shall apply to styrene butadiene rubber
                  and oil extended styrene butadiene rubber."

    2. The exemption was denied to the respondents on the ground that under clause 1-A of the
         said notification styrene butadiene latex was not entitled to it. This was the view taken all the
         way up to the Customs, Excise and Gold (Control) Appellate Tribunal, whose order is under
         challenge before us. The Tribunal decided in favour of the assessee, agreeing with the
         argument of its counsel that the exclusion in clause 1-A was only of styrene butadiene rubber
         and oil extended styrene butadiene rubber and did not cover other forms of styrene
         butadiene.

    3. It will be seen that the principal clause of the said exemption notification "exempts raw
         rubber, natural or synthetic rubber, latex, natural or synthetic..". The principal clause of the
         said notification, therefore, natural or synthetic. Bearing this in mind, one has to read clause
         1-A of the said notification. It says that the said notification shall not apply to "styrene
         butadiene rubber and oil extended styrene butadiene rubber". It covers, therefore, the rubber
         but not the latex.
    4. Our attention was drawn by learned counsel for the appellant to Item 40.02 of the Schedule

         contained in the Customs Tariff Act, 1975 where styrene butadiene rubber is shown under
         two sub-heads, "Latex" and "Others", and it was submitted that the styrene butadiene rubber
         referred to in clause 1-A of the said notification should, therefore, also be read as covering
         latex. For the reason that we have already stated, we cannot agree. Clause 1-A of the said
         notification is in the nature of an exception to the principal clause thereof and must be
         construed with regard to that principal clause. Secondly, as has been rightly pointed out by
         learned counsel for the assessee, clause 1-A is applicable not to styrene butadiene generally
         but to two categories of styrene butadiene, namely, styrene butadiene rubber and oil
         extended styrene butadiene rubber.
    5. For these reasons, we are of the opinion that the Tribunal is right in the view that it took.

6. The appeal is dismissed. No order as to costs.