TMI Blog2019 (3) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... gnated with perfumes or cosmetics, the same would fall under HS code 3307 and if they are coated with soap or detergent, then it would fall under HS code 3401 - GST rate prescribed for the applicable HS code shall be charged under Central Goods Services Tax Act, 2017 and Gujarat Goods Services Tax Act, 2017 and notifications issued thereunder. - GUJ/GAAR/R/2018/19 (In Application No. Advance Ruling/SGST&CGST/2017-18/AR/2) - - - Dated:- 10-10-2018 - SHRI R.B. MANKODI AND SHRI G.C. JAIN MEMBER Present for the applicant: Shri R.S. Sharma, Advocate The applicant M/s. Ginni Filaments Limited is engaged in the supply of (a) Wet Baby Wipes, (b) Wet Face Wipes, (c) Bed and Bath Towels and (d) Shampoo Towels, from the state of Gujarat. The applicant submitted the composition of materials used in goods supplied, size and use of the goods. It is submitted by the applicant that the company is engaged in the supply of various types of wet wipes, shampoo towels, etc. as per the requirements of the buyers. For example, under the category of Wet Face Wipes, the applicant supplies different types of Wet Face Wipes such as moisturizing cleansing , skin care wet wipes wherein th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lose wadding or webs of cellulose fibres 5603 Nonwovens, whether or not impregnated, coated, covered or laminated 9619 Sanitary towels (pads) and tampons, napkins and napkin liners for babies and similar articles, of any material Any Chapter Goods which are not specified in Schedule I, II, IV, V or VI 3.2 The applicant submitted that the applicant s Wet Baby Wipes may fall under any of the above categories owing to the overlapping nature of the description of the goods provided under the Rate Notifications. Considering that the Wet Baby Wipes are nonwovens used for cleansing the baby s delicate skin, the applicant has requested for clarity as to classification of Wet Baby Wipes under the Rate Notifications. While cosmetic and toilet preparations fall under Chapter sub-heading 3307, cleaning preparations fall under Chapter sub-heading 3401 30, 3402 and 4818. Further, napkins for babies have been covered under Chapter sub-headings 4818 and 9619. Given the overlapping nature of the entries qua the Applicant s Wet Baby Wipes, the Applicant required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3307 Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations , not elsewhere specified or included; prepared room deodorisers, whether or not perfumed or having disinfectant properties; such as Pre-shave, shaving or after-shave Preparations, Shaving cream, Personal deodorants and antiperspirants 3401 30 Organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap; paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent 3402 Organic surface-active agents (other than soap); surface-active preparations, washing preparations (including auxiliary washing preparations) and cleaning preparations , whether or not containing soap, other than those of heading 3401 4818 Toilet paper and similar paper, cellulose wadding or webs of cellulose fibres, of a kind used for household or sanitary purposes, in rolls of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 and Notification No. 41/2017-State Tax (Rate) dated 14.11.2017. 7.2 The applicant also submitted manufacturing process of Wet Baby Wipes, Wet Face Wipes, Bed and Bath Towels and Shampoo Towels. They also submitted a copy of License Number 7/C/UA/2017 dated 24.03.2017 issued under the Drugs and Cosmetics Act, 1940. 8. The applicant, vide letter dated 03.04.2018 submitted copy of Ruling No. AAR/CE/01/2018 dated 16.03.2018 passed by the Authority for Advance Ruling (Customs, Excise and Service Tax) under the Central Excise Act, 1944 wherein it has been held that Baby Wipes, Facial Wipes, Make-up remover wipes and Bed Bath Wipes are classifiable under Heading 5603. The applicant submitted that it is using similar raw material and ingredient and have same manufacturing process and is supplying the same products which are mentioned in the said Advance Ruling. The applicant requested that the said Ruling may be taken on record and may be taken into consideration before passing of Ruling in its application. It is further requested that in case it is held that the Ruling by the Advance Ruling Authority (Central Excise) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le shall, so far as may be, apply to the interpretation of this notification. 12.2 Further, Hon ble Supreme Court in the case of L.M.L. Ltd. Vs. Commissioner of Customs [Civil Appeal No. 3764 of 2003, decided on 21.09.2010 reported at 2010 (258) ELT 321 (S.C.)] = 2010 (9) TMI 12 - SUPREME COURT OF INDIA has held as follows :- 12. In Collector of Central Excise, Shillong v. Wood Crafts Products Ltd. reported in (1995) 3 SCC 454 = 1995 (3) TMI 93 - SUPREME COURT OF INDIA , it was held by this Court that as expressly stated in the statements of objects and reasons of the Central Excise Tariff Act, 1985, the Central Excise Tariffs are based on the Harmonious System of Nomenclature (HSN) and the internationally accepted nomenclature was taken into account to reduce disputes on account of tariff classification. Accordingly, for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the Harmonious System of Nomenclature (HSN). Although, the decision in the case of Woodcraft Products (supra) dealt with the interpretation of the provisions of the Central Excise Tariff there can be no doubt that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Water Di-propylene Glycol Chelating Agent Glycerin Moisturisation Propylene Glycol Humectant Aloe Barbadensis Leaf Juice (Aloe Vera) Nourishing and soothing agent PGE-40 Hydrogenated Castor Oil Emulsifying Agent Polysorbate 20 Surfactant and Fragrance Solubiliser Disodium Cocoamphodiacetate Cleansing Agent DMDM Hydantoin Preservative Propylparaben Preservative Fragrance Fragrance 13.3 The applicant has submitted the composition, size and use of Bed and Bath Towels as follows :- Fabric: Non-woven spun lace fabrics of 40-60 grams per square meter. Size of each wipe: 300 mm x 240 mm Use [As per declaration on the package]: Cleans and moisturizes skin and helps to relax and feel better. A safer alternative for person who requires body cleansing while being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Citric Acid Buffering agent 14.1 The product Wet Baby Wipes is manufactured with the use of non-woven spun lace fabrics of 40-60 grams per square meter made from 60-70% viscose (regenerated cellulose) fiber + 30%-40% polyester fiber, the size of each wipe being 150 mm X 200 mm. The Licence issued under Drugs and Cosmetics Act, 1940 for the said product, a copy of which is submitted by the applicant indicates that approx. quantity of lotion in one wipe is NLT 3.2 g. . The list of ingredients used in Wet Baby Wipes and functions of such ingredients mentioned in the copy of said licence and the list of ingredients and their functions submitted by the applicant indicates that these ingredients act as humectant, preservative, moisturisation, surfactant and fragrance solubiliser, emulsifying agent, cleansing agent, biological additive used for moisturizing, nourishing and natural antibacterial activity, chelating agent, purgative aloin (nourishing and soothing agent), vitamin and fragrance. It is also mentioned in the said licence that the above formula will be impregnated on clover fabric wipes . 14.2 The product Wet Face Wipes is manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03, or 9619 owing to the overlapping nature of the description of the goods provided under the Rate Notifications. 16.1 Chapter Note 4 of Chapter 33 of the First Schedule of the Customs Tariff Act, 1975 as well as HSN reads as follows :- The expression perfumery, cosmetic or toilet preparations in heading 3307 applies inter alia, to the following products : scented sachets; odoriferous preparations which operate by burning; perfumed papers and papers impregnated or coated with cosmetics; contact lens or artificial eye solution; wading, felt and nonwovens, impregnated, coated or covered with perfume or cosmetics; animal toilet preparations. 16.2 Further, Explanatory Notes of Harmonized System of Nomenclature provides in respect of Chapter 33 that this Chapter does not cover, inter-alia, Soaps and paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent (heading 34.01). 16.3 Chapter Heading 3401 covers Soaps; Organic surface-active products and preparations for use as soap, in the form of bars, cakes, moulded pieces or shapes, whether or not containing soap; organic surface active products and preparations for washing the skin, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2018 passed by the Authority for Advance Ruling (Customs, Excise and Service Tax) under the Central Excise Act, 1944 wherein it has been held that Baby Wipes, Facial Wipes, Make-up remover wipes and Bed Bath Wipes of the applicant therein (a different manufacturer, not the applicant herein) are classifiable under Heading 5603. While arriving at the said conclusion, it has been inter-alia observed in the said Ruling that the wipes manufactured by the applicant therein using spunlace non-woven fabric, which are merely sprinkled with water and some chemicals for aiding the process of cleaning/wiping are classifiable under Chapter Heading 5603; that the exclusion in Chapter Note 1(a) to Chapter 56 applies only in a case where the textile material is present merely as a carrying medium; that in that case, the wipes made of spunlace nonwoven fabrics perform the primary function of cleaning / wiping by absorbing dust, grime dirt, oil etc. and could not by any stretch of imagination be called merely a carrying medium. It was further observed that the wipes in question, which are used for the purpose of cleaning/wiping cannot by any stretch of imagination be called perfume, cosmetic o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. Since primary function of the article should be taken into consideration while deciding the classification, it is clear that the essential character of the wipes in the instant case is imparted by the components which are to be mixed with the textile material. 8.4 As per the explanatory notes to the HSN, the HS code 5603 clearly excludes nonwoven, impregnated, coated or covered with substances or preparations such as perfumes or cosmetics, soaps or detergents, polishes, creams or similar preparations. The HSN is reproduced as follows : The heading also excludes: Nonwoven, impregnated, coated or covered with substances or preparations [i.e. perfumes or cosmetics (Chapter 33), soaps or detergents (heading 3401), polishes, creams, or similar preparations (heading 3405), fabric, softeners (heading 3809)] where the textile material is present merely as a carrying medium. Further, HS code 3307 covers wadding, felt and non-woven, impregnated, coated or covered with perfumes or cosmetics. The HS code 3401, would cover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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