TMI Blog2021 (1) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... th at length by the Hon ble High Court of Madhya Pradesh in case of RAJ PACK WELL LTD. VERSUS UNION OF INDIA [ 1989 (9) TMI 120 - MADHYA PRADESH HIGH COURT] where Hon ble High Court of Madhya Pradesh has discuss what is textile according to the Section 2(g) of Textiles Committee Act, 1963 (Act 41 of 63) and according to the above definition, any fabric or cloth or yarn or garment if made wholly or in part of cotton, wool, silk, artificial silk or other fibre shall be called textiles, Nowhere in the aforesaid definition of fibre or textiles plastic has been mentioned as a commodity to be included in the definition of fibre or textiles . Therefore, it can be concluded that intermediate Fabrics manufactured from Fibre grade poly propylene granules cannot be considered as textile material. Under CTH No. 63 of Custom Tariff Act, 1975 only covers textile sacks and bags of a kind normally used for the packing of goods whereas applicant goods, Non-Woven Bags is not manufactured from textile material as discussed above. Hence, applicant s claim that their product covers under Chapter Heading No. 6305 of the Custom Tariff Act, 1975 is not correct. The applicant product, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority under Section 94 of the Kerala Value Added Tax Act, 2003 in case of M/s Malabar Treads, Manjeri. The authority after considering the Heading No. 5603 as appearing in the Schedule to the Central Excise Tariff concluded that the said product would appropriately be classifiable under HSN Code 6305.33.00 of the Customs Tariff Act which correspondence to entry no. 174 (7) (1) of List A of the third Schedule to the KVAT Act, 2003. ( Copy of Order No. C3/17556/09/CT dated 29-09-2009 is annexed as Annexure-A). 4. The Applicant further submitted that after introduction of the GST Act, 2017 also the issue of classification was under consideration by various manufacturers and representations were being made. The applicant had approached the DKTE CENTER OF EXCELLENCE IN NON WOVENS (Govt. Department) and the Director of the said Organization has clarified that the Polypropylene Non-Woven fabrics are classifiable under Heading No. 5603 and these Polypropylene Non-Woven fabrics are basically textile materials and not plastic. (Copy of clarification dated 30-08-2017 is annexed as Annexure-B). 5. The Applicant further submitted that Madurai District Non-Woven Bag and Cotton Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticle and therefore the product manufactured out of the said material will have to be considered as Textile Article and classifiable under Heading no. 63.05. 9. The Applicant further submitted that in view of Rules of interpretation Heading No. 6305.3300 being specific heading would prevail over the general Heading of 3923. 10. The Applicant further submitted hat the Honorable Advance Ruling Authority as referred herein above as also the Honorable Appellate Advance Ruling Authority have settled the law and have confirmed the classification of Polypropylene Non-Woven Bags under Heading No. 6305.3300 and, therefore, the same would be binding. The decision of Honorable Appellate Authority for Advance Ruling is of 13-05-2019, i.e. after the clarification issued by TRU Section of Ministry of Finance, and therefore the same would prevail over the clarification. 11. The Applicant further submitted that the Director of DKTE Center of Excellence in Non-Woven have also clarified beyond doubt that the Polypropylene Non-Woven Fabric is textile material and not plastic and, therefore, the product manufactured out of such material could never be classified as plastic material. 12. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion given by the applicant, we observe that the applicant is engaged in manufacturing of Polypropylene Non-Woven Bags through the intermediate product, i.e. Non-Woven Fabrics manufactured from Fiber grade poly propylene granules by adopting the Spun Bond technology. In this technology, poly propylene granules are fed to the hopper and passed through extruder at certain temperature. The melted material after filtering passed through the spinning unit to obtain a continuous single filament. The said filaments are then subject to lying on the continuous web and under control pressure thermal bonding. The resultant product is Non-Woven fabric, which is called Polypropylene Non-Woven fabrics. The issue for decision before us is the appropriate Rate of Tax and HSN code for Nonwoven Bags manufactured by the applicant. 18. In order to determine the tax liability on said goods, we are required to refer to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, as amended, containing the sub-headings as well as the rates of Central Tax GST applicable to various goods, which are covered under 6 schedules as under: (i) 2.5 per cent. in respect of goods specified in Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea sachets. Packing cloths which after use as bale wrapping are roughly or loosely stitched together at the edges, but which do not constitute finished or unfinished sacks or bags, are excluded (heading 63.07). 20. We find the competing heading for the product is CTH 3923. For ease of reference, the relevant chapter notes, the tariff entry and the HSN Explanatory note is given below : CHAPTER 39 Plastics and articles thereof 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 and 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 34O3; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue of classification of PP/HDPE Bags or sacks, made of HDPE tapes and fabrics, has been dealt with at length by the Hon ble High Court of Madhya Pradesh in case of M/s. Raj Packwell Ltd. v. UOI [1990 (50) E.L.T. 201 (M.P.)] = 1989 (9) TMI 120 - MADHYA PRADESH HIGH COURT . While deciding the identical issue, the Hon ble High Court has observed: In the Textiles Committee Act, 1963 (Act 41 of 63) the word fibre has been defined in Section 2(a) as under:- fibre means man-made fibre including regenerated cellulose rayon, nylon and the like. Textiles has been defined in Section 2(g) as under:- Textiles means any fabric or cloth, or yarn or garment or any other articles made wholly or in part of - (i) Cotton; or (ii) Wool; or (iii) Silk; or (iv) Artificial silk or other fibre, and includes fibre . Therefore, according to the above definition, any fabric or cloth or yarn or garment if made wholly or in part of cotton, wool, silk, artificial silk or other fibre shall be called textiles. The definition of fibre includes the regenerated cellulose, rayon, nylon and the like. Nowhere in the aforesaid definition of fibre o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any fabric or cloth or yarn or garment if made wholly or in part of cotton, wool, silk, artificial silk or other fibre shall be called textiles, Nowhere in the aforesaid definition of fibre or textiles plastic has been mentioned as a commodity to be included in the definition of fibre or textiles . Therefore, it can be concluded that intermediate Fabrics manufactured from Fibre grade poly propylene granules cannot be considered as textile material. Under CTH No. 63 of Custom Tariff Act, 1975 only covers textile sacks and bags of a kind normally used for the packing of goods whereas applicant goods, Non-Woven Bags is not manufactured from textile material as discussed above. Hence, applicant s claim that their product covers under Chapter Heading No. 6305 of the Custom Tariff Act, 1975 is not correct. The applicant product, Non-Woven Bags is manufactured from Fibre grade poly propylene granules, which falls under the definition of plastic material, therefore, goods, Non-Woven Bags is classifiable under CTH No. 3923 of the Custom Tariff Act, 1975. 22. The applicant has referred to Advance Ruling in the case of M/s. U. S. Polytech [Order No. 31/WBAAR/2018-19, dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otton, silk, woollen, rayon, nylon or of any other description or made out of any other material is woven into a fabric, what comes into being is a textile and it is known as such. It may be cotton textile, silk textile, woollen textile, rayon textile, nylon textile or any other kind of textile . The method of weaving adopted may be the warp and woof pattern as is generally the case in most of the textiles, or it may be any other process or technique. There is such phenomenal advance in science and technology, so wondrous is the variety of fabrics manufactured from materials hitherto unknown or un-thought of and so many are the new techniques invented for making fabric out of yarn that it would be most unwise to confine the weaving process to the warp and woof pattern. Whatever be the mode of weaving employed, woven fabric would be textiles . What is necessary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to form a fabric. Moreover a textile need not be of any particular size or strength or weight. It may be in small pieces or in big rolls; it may be weak or strong, light or heavy, bleached or dyed, according to the req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanatory notes to the HSN to HS code 39.23, the heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products and includes boxes, crates, cases, sacks and bags. 7.3 Further as per the Chapter note to Chapter 39, the expression plastics means those materials of headings 39.01 to 39.14 which are or have been capable, either at the moment of polymerization or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticizer) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence. 7.4 Thus it is clarified that Polypropylene Woven and Non-Woven Bags and PP Woven and Non-Woven Bags laminated with BOPP would be classified as plastic bags under HS code 3923 and would attract 18% GST. 7.5 Non-laminated woven bags would be classified as per their constituting materials . From the above clarification, it is crystal clear that Polypropylene Woven and Non-Woven Bags would be classified as plastic bags under HS code 3923 and would attract 18% GST. 25. In view of the above, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.10.2019 to 30.12.2019. (C) From 01.01.2020 to till date: The Notification No. 27/2019-C.T. (Rate) dated 30.12.2019 further amended the Notification No.01/2017-C.T. (Rate) dated 28.06.2017 wherein the entry at 80AA in the Schedule-II-6% of the Notification was omitted and a new entry 163B was inserted in Schedule III-9% of the Notification, which reads as under: Schedule III-9% Sl.No. Chapter/Heading/Sub Heading/ Tariff Item Description of the Goods 163B 3923 or 6305 Woven and non-woven bags and sacks of polyethylene or polypropylene strips or the like, whether or not laminated, of a kind used for packing of goods . Therefore, effective from 01.01.2020, the rate of the product in hand is 18% (9% CGST and 9% SGST). 27. In the light of the above, we rule as under: RULING Question-1: Whether the product Non-Woven Bags manufactured through the intermediate product, Non-Woven Fabrics classifiable under Heading No. 5603 are properly classifiable under Heading No.6305 or under Heading No. 3923? Answer : The Non-Woven ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
