TMI Blog2019 (11) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... ion should be treated as an exception to Chapter Note 2(a)(4) to Chapter 59. The Applicant s reference to rule 3(b) of the General Rules of Interpretation is of no use, as recourse to such rules is permitted under rule 1 of the said General Rules only if the terms of the headings and Section Notes or Chapter Notes do not otherwise require. It is evident from the above discussion that the Applicant s product is classifiable under Heading 5903 in terms of the Explanatory Notes to Chapter 59. Rule 3(b) of the General Rules of Interpretation is, therefore, not applicable. The Applicant s product, namely fusible interlining cloth, is classifiable under Heading 5903 in Chapter 59 of the First Schedule of the Customs Tariff Act, 1975. - Case No. 38 of 2019 and Order number 33/WBAAR/2019-20 - - - Dated:- 11-11-2019 - MS. SUSMITA BHATTACHARYA, AND MR. PARTHASARATHI DEY, MEMBER Applicant s representative: Sri Saurabh Bagaria, Advocate Sri Indranil Banerjee, Advocate Preamble A person within the ambit of Section 100 (1) of the Central Goods and Services Act, 2017 or West Bengal Goods and Services Act, 2017 (hereinafter collectively called the GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le in Chapters 50 to 55, depending on the textile material the fabric is made of. 2.4 The Applicant submits that Chapter Note 2(a) to Chapter 59 of the Tariff Act was never intended to apply to textile fabrics partially or discretely coated with plastic. Between 01/03/1989 and 15/03/1995, fusible interlining cloth partially coated with plastic was classifiable under Heading 5903 because of one Chapter Note 2(c) to Chapter 59 of the Tariff Act. It classified textile fabrics partially coated with plastic by dot printing process under Heading 5903. The said Note 2(c), however, was deleted wef 16/03/1995. 2.5 The Applicant also makes submissions on the legal position in this regard, as appears from the circulars of the CBEC issued from time to time and their judicial scrutiny. Way back in 1988, the CBEC issued Circular No. 24/Coated Fabrics/88-CX.1 dated 02/09/1988, read with the subsequent telex dated 30/09/1988. The CBEC concluded that coated fabrics were classifiable under Heading 5903 provided: i) The product should have a continuous and adherent film or layer of plastic on one side of the fabric surface, ii) The fabric should be impervious, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter 59. Chapter Note 2(a)(4) to Chapter 59 makes it clear that fabrics partially coated with plastic and bearing designs usually fall within Chapters 50 to 55, 58 or 60. Furthermore, Chapter 39 does not include the fabrics partially coated with plastic. 2.1 1 The Applicant also draws attention to rule 3(b) of the General Rules of Interpretation. Mixtures or composite goods consisting of different materials shall be classified as if they consisted of the material or component that give them their essential character. In the fusible interlining cloth sample cotton fabric by weight ranges from 70% to 85%. It is, therefore, classifiable under Chapter 52. 3. Submissions of the concerned officer from the Revenue and reply of the Applicant 3.1 The concerned officer from the Revenue examines the question from the point where the Applicant concludes its argument. It appears from the test report that the uncoated side of the Applicant s sample is made of cotton. If it were an article classifiable under Chapters 50 to 55, depending upon the yarn used for weaving the fabric, it should be classifiable under any Heading of Chapter 52. 3.2 As the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is against all principles of classification to consign a product to the orphanage of the residuary clauses when it can be reasonably classifiable under Heading 5212. It refers to the case of Dunlop India [(1983) 13 ELT 1566 (SC)] = 1975 (10) TMI 94 - SUPREME COURT . Furthermore, the word technical derives its meaning from the accompanying words such as card clothing, narrow fabrics made of velvet impregnated with rubber for covering weaving spindles and the like. The fusible interlining cloth is not a technical article in that sense. 4. Observations and findings of the Authority 4.1 The purpose of classification is to ascertain the applicability of any entry, specifying the rate of tax or exemption from payment of tax, under the notifications issued under the GST Act. Explanation to the Rate Notification No. 1/2017-CT (Rate) dated 28/06/2017 (the corresponding State Notification No. 1125-FT dated 28/06/2017), as amended from time to time, mentions that Tariff item, sub-heading, heading and Chapter in the Rate Notification refer to those specified in the Tariff Act. For interpreting the Rate Notification, so far as may be, the Rules of Interpretation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the alignment was that the Explanatory Notes to the HSN Code would now be applicable to clarify matters of classification under the Excise Act as well. The Explanatory Notes to the HSN Code or the Chapter Notes to Chapter 59 of the Tariff Act had not contained any provision like Chapter Note 2(c) to Chapter 59 of the Central Excise Tariff Act, 1985. The said Chapter Note 2(c) was, therefore, deleted by the Finance Act, 1995. CBEC, however, maintained that fusible interlining cloth partially coated with plastic would continue to be classified under Heading 5903. No doubt, Circular No. 433/66/98-CX-6 dated 27/1 1/1998 differs from Circular No. 5/89 dated 15/06/1989 4.5 The difference arises from the application of the provisions of the Explanatory Notes to the HSN Code. In the said Explanatory Notes to Chapter 59 textile fabrics which were spattered by spraying with visible particles of thermoplastic material and were capable of providing a bond to other fabrics or materials on the application of heat and pressure were classifiable under Heading 5903. According to Circular No. 433/66/98-CX-6 dated 27/11/1998, such classification should be treated as an exception to Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext, Circular No. 433/66/98-CX-6 dated 27/11/1998 of CBEC is relevant and has persuasive value. 4.10 Chapter Note 2(a)(4) to Chapter 59 says that fabrics partially coated or partially covered with plastics and bearing designs resulting from these treatments are excluded from Heading 5903 and are usually covered in Chapter 50 to 55, 58 or 60, depending on the materials used. At the same time, according to the Explanatory Notes to the HSN Code, textile fabrics which are spattered by spraying with visible particles of thermoplastic material and are capable of providing a bond to other fabrics or materials on the application of heat and pressure are classifiable under Heading 5903. According to Circular No. 433/66/98-CX-6 dated 27/11/1998 of CBEC, such classification should be treated as an exception to Chapter Note 2(a)(4) to Chapter 59. It appears from the production process described in para no. 3.2 that fusible interlining cloth satisfies the conditions for placing it in the category of the above exception. 4.1 1 Nowhere in its Application or submissions - written or oral - the Applicant takes the view that Circular No. 433/66/98-CX-6 dated 27/11/1998 of CBEC h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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