TMI Blog2019 (5) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Tariff was aligned with Customs Tariff after the enactment of the Central Excise Tariff Act 1985 which are in alignment with the HSN. Further, in the case at hand the process of manufacture of the Propylene Mat is similar to that considered in the Circular. Therefore we hold that the Polypropylene Mats supplied by the applicant is classifiable under CTH 46019900 - It is pertinent to note that the classification of the Propylene Mats under CTH 4601 is in line with the classification in the Drawback Schedule in respect of Polypropylene Mats . Applicable rate of tax - HELD THAT:- The product in hand is classified under CTH 4601 - CTH 4601 covers plaits and similar products, whether or not being finished articles but made of vegetable materials such as of Bamboo, of rattan, of Other Vegetable materials. In the case at hand, the mats are made of Polypropylene, which are definitely not of vegetable materials and therefore are not covered under SI.No. 103 of Schedule - II above. As the Polypropylene mats are not specified elsewhere in the rate schedules, the applicable rate CGST @ 9% as per Sl.No. 453 of Schedule - III of Notification No. 01/2017-C.T.(Rate) date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter Heading 4601 or 3902 ? 2. What is the applicable tax rate for the Polypropylene Mats ? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted copy of Challan evidencing payment of application fees of ₹ 5000/- each under Sub-rule (1) of Rule 104 of CGST Rules 2017 and also SGST Rules 2017. 2. The Applicant is engaged in the business of trading of Polypropylene Mats on wholesale and retail basis. They are buying from various manufacturers and selling the Polypropylene Mat. The HSN code for the mats given by the manufacturer is 460101. They are invoicing the outward supply mentioning the description as Polypropylene Mats / Mattings under the HSN Code 460101. 2.1 The Applicant has stated that the HSN Code for the Polypropylene Mats as given by the manufacturer is 460101 and it is also in the GST Tariff Ready Reckoner. Further, as per the Circular No. 4/2018 - Customs in F.No. 609/12/2018 - DBK dated 24/01/2018, issued by the Central Board of Customs Excise, Department of Revenue, Ministry of Finance, the Polypropylene Mats are classified under tariff item 460101. 2.2 They have furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the written submission, they had stated that They are doing polypropylene Mat business; the HSN Code for the mats as given by the Manufacturer is 460101 Chapter Notes to Chapter 46 of the HS Nomenclature 2017 Edition of the World Customs Organisation exactly describes the Polypropylene Mat which is also called as Satranj or Polypropylene Straw Mat. Circular in F.N0. 93/24/87-CX3 dated 16.06.1987 issued by the Ministry of Finance clarified the HSN Code for Polypropylene Mat is 4601 The Judgment of the Customs, Excise and Service Tax Tribunal in the case of Supreme Industries Ltd. Vs. Commissioner of Central Excise on 27th May 2004 = 2004 (5) TMI 378 - CESTAT, NEW DELHI decided that the correct HSN Code is 4601 for Polypropylene mats As per Circular No. 4/2018-Customs, F.No. 609/ 12/2018-DBK dated 24.01.2018, issued by the Central Board of Customs Excise, the Polypropylene mats are classified under tariff item 460101 They are not manufacturers and they are buying from various manufacturers and selling the Mat. The manufacturers are classifying under 4601. 3.2 The Applicant filed copy of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tariff and the entries related to the CTH 3902 are examined as under: The Chapter Notes (relevant) are as follows: Notes . 1. Throughout this Schedule, the expression plastics means those materials of headings 3901 to 3914 which are or have been capable, either at the moment of polymerisation or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence. Throughout this Schedule any reference to plastics also includes vulcanised fibre. The expression, however, does not apply to materials regarded as textile materials of Section XI. 2. This Chapter does not cover: (a) lubricating preparations of heading 2710 or 3403; (b) waxes of heading 2712 or 3404; (c) separate chemically defined organic compounds (Chapter 29); (d) heparin or its salts (heading 3001); (e) solutions (o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46019400 -- Of other vegetable materials 46019900 -- Other Chapter Note 1 of Chapter 46 of Customs Tariff is as follows: Notes : 1. In this Chapter, the expression plaiting materials means materials in a state or form suitable for plaiting, interlacing or similar processes; it includes straw, osier or willow, bamboos, rushes, reeds, strips of wood, strips of other vegetable material (for example, strips of bark, narrow leaves and raffia or other strips obtained from broad leaves), unspun natural textile fibres, monofilament and strip and the like of plastics and strips of paper, but not strips of leather or composition leather or of felt or non-wovens, human hair, horsehair, textile rovings or yarns, or monofilament and strip and the like of Chapter 54. 3. For the purposes of heading 4601, the expression plaiting materials, plaits and similar products of plaiting materials, bound together in parallel strands means plaiting materials, plaits and similar products of plaiting materials, placed si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey include : (a) Products made from two or more strands by twisting together, joining together or otherwise assembling ( other than decorative motifs of heading 46.02 ). (b) Products (e.g., those known in trade as China cord ) consisting of a kind of cord made from non-crushed vegetable materials assembled simply by twisting. The above goods are mainly used in millinery, but are also used for the manufacture of certain furniture, shoes, mats, baskets or other receptacles. The goods of this heading may contain spun textile yam serving primarily for assembly or reinforcement purposes, whether or not having a supplementary decorative effect. (B) Plaiting materials, plaits and similar products of plaiting materials, bound together in parallel strands or woven, in sheet form, whether or not being finished articles (for example, mats, matting, screens). The goods of this group are obtained either directly from plaiting materials as defined in the General Explanatory Note to the Chapter or from the plaits or similar products of plaiting materials described in Part (A) above. Those obtained directly from pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a state or form suitable for plaiting, interlacing or similar processes which includes monofilament and strip and the like of plastics. mats made by weaving or binding parallel strands of plaiting materials are covered in the CTH 4601. 5.3 In the case at hand as per the manufacturing process furnished, it is seen that pellets on application of heat air on an extruder machine are converted into the polypropylene tubes(straws)which is used as plaiting material. These are then woven or bound together in sheet form by placing them parallel to each other. After weaving the mats are cut into market size requirement. The subject goods are not classifiable under the chapter 39 as per Chapter Note 2 to chapter 39. Further, they are covered under chapter 46 and more specifically under CTH 46019900. 5.4 We find that the classification of the Polypropylene Mats as to whether they fall under Chapter 39 or Chapter 46 of Central Excise Tariff is considered by the CBEC in Circular F.No. 93/24/87-CX-3 dated 16/06/1987. The operative portion of the Circular is extracted hereunder: A doubt has been raised as to whether plastic mat/ matting (Satranj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 46. Therefore, plastic mat matting (Satranji) appears to be covered under Chapter 46 of CET as an article of plaiting materials. Both under Note 1 of Chapter 46 of CET and Note of Chapter 46 of Customs Tariff plaiting material includes monofilament and strips and the like of plastic . It is also seen from the description of Heading No. 46.01 of the HSN that it covers mat/ matting/ screens of all plaiting materials and in the HSN Chapter Note 1 of Chapter 46 also, plaiting materials includes monofilaments and strips of and the like of plastics . In the HSN Notes below Heading No.46.01, mats/matting (whether rectangular or in other shapes) made by weaving or binding parallel strands of plastic material, twine or binding material strands of plaiting material, twine, cord etc, are also mentioned as goods falling within the scope of Heading No. 46.01 of the HSN. 5. In view of the above, it is clarified that Plastic Mat/Matting (Satranji) would be appropriately classified under Heading No. 46.01 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). The Central Excise Tariff was aligned with Customs Tariff after the enactment of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule I, Il, IV, V or VI Notification No. 6/2018-C.T.(Rate) dated 25.01.2018 amended the entry at Sl.No. 198A of Schedule I inserted vide Notification No. 27/ 17-C.T.(Rate) dated 22.09.2017 and the amended entry was amended by Notification No. 6/2018 - C.T.(Rate) dated 25.01.2018 and Notification No. 06/2018-state ntfcn. Rate, dated 25-01-2018 reads as S.No. Chapter Heading/ Sub- heading/Tariff item Description of goods 198A 4601, 4602 Manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork The above entry covers the Polypropylene mats falling under CTH 4601. Therefore the rate applicable is 2.5% CGST and 2.5% SGST, effective from 25.01.2018. The said entry is renamed as SI.No. 198AA of Schedule I of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 vide Notification No. 24/2018 dated 31.12.2018 and as Sl.No. 198AA of Schedule I of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 vide Notification No. 24/2018-state ntfcn. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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