TMI Blog2021 (1) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... ayon or nylon. Hence fabric made of Fiber grade Poly Propylene granules cannot be considered as textile. Hence, ratio of above case law is not squarely applicable to the present case. Non-Woven Bags manufactured through the intermediate product, i.e. Non-Woven fabric manufactured from Fiber grade poly propylene granules by adopting the Spun Bond technology, merits classification under HS code 3923, as also clarified by the CBIC in the Board Circular No.80/54/2018-GST issued from F. No. 354/432/2018-TRU dated 31st December, 2018 Applicable rate of GST on product - Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 - HELD THAT:- The rates of GST leviable on above product were changed from time to time, as below: (a) Period 01.07.2017 to 30.09.2019 - rate of CGST and SGST @ 9% each, totalling to 18%. (b) Period 01.10.2017 to 31.12.2019 - rate of CGST and SGST @ 6% each, totalling to 12%. (c) Period 01.01.2020 to till date - rate of CGST and SGST @ 9% each, totalling to 18%. - GUJ/GAAR/R/62/2020 - - - Dated:- 17-9-2020 - SANJAY SAXENA AND MOHIT AGRAWAL MEMBER Present for the applicant : Shri Paresh Sheth Adv. M/s. Max Non Woven Pvt. Ltd., C type 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer Association had approached the Commissioner of Central GST and Central Excise, Madurai vide letter dated 22.12.2017 and had requested to clarify the classification of Non Woven Bags etc. The Office of the Commissioner vide letter dated 01.01.2018 issued from F. No.IV/16/84/2017Tech (GST) has clarified that Non Woven bags are classifiable under Heading No. 63059000 and are eligible for exemption under Notification No. 01/2017-CT (Rate). 7. The applicant submitted that one of the manufacturer M/s. U.S Polytech of Howrah had also approached the Hon ble Advance Ruling Authority for classification of Polypropylene Non Woven Bags; the said authority was of the view that the said product is classifiable under Heading No. 39.23. However, on appeal to the Appellate Authority for Advance Ruling, the Appellate Authority have reversed the said order and settled the law that the Polypropylene Non Woven Bags would appropriately be classifiable under Heading No. 6305 and the Advance Ruling Authority had erred in holding that PP Non woven Bags were classifiable under Heading No. 39.23. 8. The applicant further submitted that the Tax Research Unit (TRU), Department of Revenue, New ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Porrits and Spencers (Asia) Limited V/s. State of Haryana reported in 1983 (13) ELT 1607. The Hon ble Supreme Court of India after considering the relevant facts has settled the law that the word Textile would also cover the fabric manufactured through any material. Personal Hearing 15. Personal hearing in the matter was held on 06-08-2020. Authorised representative of the company appeared on behalf of the applicant and reiterated the submission made in the Application. DISCUSSION FINDINGS 16. We have considered the submissions made by the applicant in their application for advance ruling as well as the arguments/discussions made by their representative. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 17. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the GGST Act. 18. We observe that the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pylene stip or the like 6305 39 00 --Other 6305 90 00 -Of other textile materials This heading covers textile sacks and bags of a kind normally used for the packing of goods for transport, storage or sale. These articles, which vary in size and shape, include in particular flexible intermediate bulk containers, coal, grain, flour, potato, coffee or similar sacks, mail bags, and small bags of the kind used for sending samples of merchandise by post. The heading also includes such articles as tea sachets. Packing cloths which, after use as bale wrappings, 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 are 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 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such as boxes, cases, crates, sacks and bags (including cones and refuse sacks), casks, cans, carboys, bottles and flasks. The heading also covers : (i) Cups without handles having the character of containers used for the packing or conveyance of certain foodstuffs, whether or not they have a secondary use as tableware or toilet articles; (ii) Bottle preforms of plastics being intermediate products having tubular shape, with one closed end and one open end threaded to secure a screw type closure, the portion below the threaded end being intended to be expanded to a desired size and shape. (b) Spools, cops, bobbins and similar supports, including video or audio cassettes without magnetic tape. (c) Stoppers, lids, caps and other closures. The heading excludes, inter alia, household articles such as dustbins, and cups which are used as tableware or toilet articles and do not have the character of containers for the packing or conveyance of goods, whether or not sometimes used for such purposes (heading 39.24), containers of heading 42.02 and flexible intermediate bulk containers of heading 63.05. 22. We find that the issue of classification of PP/HDPE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earlier judgments of the CEGAT approved by the Supreme Court and accepted by the department clearly go to show that HDPE bags are the bags woven by plastic strips and they, therefore, are goods of plastic and the material used for weaving those bags being the strips of plastic made from plastic granules, the strips of plastic used for weaving aforesaid HDPE woven sacks has to be classified as an item under Entry 3920 of Chapter 39 and not under Entry 5406 of Chapter 54. Accordingly, entries of finished goods have also to be made under proper Chapter of the Tariff Act treating them as the finished goods made of plastic strips. In the result we hold that HDPE strips or tapes fall under the Heading 3920, Sub-heading 3920.32 of the Central Excise Tariff Act and not under heading 5406, sub-heading 5406.90. Similarly HDPE Sacks fall into Heading 3923, Sub-heading 3923.90.... 23. In the above decision, Hon ble High Court of Madhya Pradesh has discussed 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, art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whereas, in order to understand the meaning of said Paragraph, it is necessary to read the order thoroughly and comprehensively. The Hon ble Supreme Court, in the said Order has defined what is textile and the relevant part of the order is reproduced as under for better understanding: 6. There can, therefore, be no doubt that the word textiles in Item 30 of Schedule B must be interpreted according to its popular sense, meaning that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it . There we are in complete agreement with the Judges who held in favour of the Revenue and against the assessee . But the question is : What result does the application of this test yield? Are dryer felts not textiles within the ordinary accepted meaning of that word? The word textiles is derived from the Latin texere which means to weave and it means any woven fabric. When yarn, whether cotton, 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... type of material of cotton, silk, rayon or nylon. Hence fabric made of Fiber grade Poly Propylene granules cannot be considered as textile. Hence, ratio of above case law is not squarely applicable to the present case. 26. Reference is also invited to CBIC (TRU) Circular No.80/54/2018-GST issued from F. No. 354/432/2018-TRU dated 31st December, 2018, clarifying GST rates classification in respect of various goods. Para 7 of subject Circular has clarified that the goods viz. polypropylene woven and non-woven bags are classifiable under HS code 3923 and attracts GST @ 18%, the relevant portion is extracted as below: Applicability of GST on supply of Polypropylene Woven and Non-Woven Bags and PP Woven and Non-Woven Bags laminated with BOPP : 7.1 Representations have been received seeking the classification and GST rates on Polypropylene Woven and Non-Woven Bags and Polypropylene Woven and Non-Woven Bags laminated with BOPP. 7.2 As per the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. The rates of GST leviable on above product were changed from time to time, as discussed below: (A) From 01.07.2017 to 30.09.2019: The goods of Chapter heading 3923 are covered under Sr. No. 108 of Schedule-III of Notification No.01/2017-CT (Rate) dated 28.06.2017, up to 30.09.2019 and therefore, the applicable rate of total GST was 18% (CGST- @ 9%+ SGST- @ 9%) up to 30.09.2019, as reproduced herein below: Schedule III- 9% Sl.No. Chapter/Heading/Sub Heading/ Tariff Item Description of the Goods 108. 3923 Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics (B) From 01.10.2019 to 31.12. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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