DUNLOP INDIA LTD. versus UNION OF INDIA AND ORS

Citation: [1976] 2 S.C.R. 98 · Decided: 06-10-1975 · Supreme Court of India · Bench: A. ALAGIRISWAMI · Disposal: Appeal(s) allowed

Cited by 9 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

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98 
DUNLOP INDIA LTD. 
v. 
UNION OF INDIA AND ORS 
October 6, 1975 
[A. ALAGIRISWAMI, P. K. GOSWAMI AND N. L. UNTWALIA, JJ.] 
Indian Tariff Act 19,34-ltems 39, 82-"V. P. Latex"-Classification of-
lnterference under Art. 136 of the Constitution in classification of excisable 
items-Rule of Practice-Whether "V.P. Latex" an item .of "raw rubber" falling 
under l.C.T. 89-Whether showing by the agents, while filling up the various 
columns of the Bills of Entry as "!.C.l. item 87-V.P. Latex·•, operates as 
''Estoppel by conduct" to claim refund. 
The appellants, ma·nufacturers of automobile tyre» import "V.P. Latex'', an 
essential ingredient for the manufacture of tyres. 
The 
customs 
authorities 
(Appraising) at Calcu.tta and Madras classified it as non raw·rubber, an item 
covered under item 82(3) (now 87) of the Indian Customs Tariff and levied 
duty in addition to the counterva.iling duty. 
On appeals, while the Appellate 
Collector of Customs, ;Madras maintained the appraiser's stand, the Appellate 
Collector of Customs, Calcutta accepted the· view that V.P. Latex is an item 
of raw rubber and covered by Item 39 of the Indian Customs Tariff. 
The 
Central Government in revision, however, held that "V.P. Latex 
being an 
aqueous dispersion of synthetic resin is covered by Item 87 J.C.T." and thus 
confirmed the Madras view. 
On appeal, by special leave the appellants contended, (i) that V.P. Latex 
is a synthetic rubber latex and never to be taken for synthetic rc»in in as 
much as'.-
(a) V.P. Latex, being rubber can be vulcanised while synthetic resin cannot 
be 
(b) .V.P. Latex, when coagu.lated, the coagulum answers fully the A.S.T.M. 
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standards including elongation tests prescribed for rubber. 
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(c) In the international field of rubber manufacture, all over the world, 
V.P. Latex i'> fully recognised as a synthetic rubber latex and not as a synthetic 
resin and 
(d) Even the entry 150 of the "Red Book", "Import Trade Control Policy" 
Vol.. I for the various years shows under "Actual Users for Synthetic rubber" 
specifically as including "Vinyl Pyridine lated" (VP-Latex)." 
Accepting .the appeal, the Court 
HBLD : (1) It is not for the court to determine for itself under Art. 136 
of the Constitution under which item a particular article falls. It is best left 
to the authorities entrusted with the subject. 
But where the very basis of tlle 
reason for including the article under a residuary head, in order to charge 
higher duty is foreign to a proper determination of this kind, the Court wiil 
be loath to say that it will not interfere. 
[113 E-F] 
V. V. Iyer of Bombay v. Jasjit Singh, Collector of Customs and Anr., [1973] 
1 S.C.C. 148, Collector of Customs, Madras v. K. Ganga Setty, fl 963] 2 S.C.R. 
277 distinguished. 
Commissioner of Sales Tax, U.P. v. Mis. S. N. Brothers, Kanpur, [1973] 2 
S.C.R. 825 not applicable. 
(ii) There is no estoppel in law against a party in a taxation matter. Giving 
of a classification by the appellants agents in order to clear the goods for customs, 
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either under some misapprehension or in accordance with the wishes of the 
au.thorities is of no significance especially when Jaw allows them the right to 
ask for refund on a proper appraisement and when they actually applied for. 
[113H, 114AJ 
, 
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DUNLOP INDIA v. UNION (Goswami, J.) 
99 
(iii) Under Section 12 of the Customs Act of 1962, the relevant taxing 
event is the importing into or exporting from India. Condition of th~ art~cle 
at the time of importing is a material factor for the purpose of class1ficat1~m 
as to under what head, duty will be leviable. The reason given by the. authority 
that V.P. Latex when coagulated as solid rubber cannot be commercially used 
as an economic proposition is an extraneous consideration for classiikation. 
The basis of the reason with regard to the end-use of the article is absolutely 
irrelevant in the context of the entry where there is no reference to the use 
or adaptation of the article. 
[l lOE-G, 114-D-E] 
(iv) It is well established tha1 in interpreting the meaning of words in a 
taxing st>1tute, the acceptation of a particular word by the Trade and is popular 
meaning shou.ld commend itself to the authority. It is clear that meanings 
given to artides fa a fiscal statute must be as people in trade and commerce, 
conversant with the subject, generally treat and understand them in the usual 
course. 
But once an article is classified and put under a dis

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