TMI Blog2021 (1) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs. Since heading 3926 reads as Other articles of plastics and articles of other materials of headings 3901 to 3914 , it implies that articles of plastics or articles of other materials not covered in any of the headings from 3901 to 3925 would be covered under heading 3926 which is a residuary entry. As per the explanatory notes to HSN with regard to heading 3926, the heading 3926 covers articles, not elsewhere specified or included, of plastics or of other materials of headings 39.01 to 39.14 - thus, the products namely HDPE Tarpaulin, PE laminated fabric PP ropes, pondliner, vermibed, weed mat, wagon cover, fumigation cover, azolla bed, agro shade net, HDPE woven laminated fabrics and PP/HDPE woven fabric would invariably be covered under heading 3926 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975). Further, looking to the use of Grow bags , we find that they would be rightly classifiable under Heading 3923. Grow Bags - HELD THAT:- Grow bags is classifiable under Sub-heading No.39232990. The other products namely HDPE Tarpaulin, PE laminated fabric, PP ropes, pondliner, vermibed, weed mat, wagon cover, fumigation cover, azolla bed, agro shade net, HDP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in manufacturing of below mentioned products for which they are proposing HSN code as mentioned against the respective products: Sr.No. Name of the product Proposed HSN code Proposed rate of tax 01. HDPE Tarpaulin/PE laminated fabric 59039090 12 02. PP Ropes 56074900 12 03. Pondliner 54072090 5 04. Vermibed 54072090 5 05. Weed mat 54072090 5 06. Wagon cover 59039090 12 07. Fumigation cover 59039090 12 08. Azolla Bed 54072090 5 09. Grow bags 540720 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Loading for shipments. 5. The applicant has submitted that the uses of the products manufactured by them for which they are applying for advance ruling under Section 97(2) of the SGST Act, 2017 are as follows which might help the advance ruling authorities to determine the proper classification of goods in which company is engaged in adequate and transparent manner: Sr.No. Name of the product Use of product 01. HDPE Tarpaulin/PE laminated fabric Agriculture 02. PP Ropes Industrial 03. Pondliner Agriculture 04. Vermibed Agriculture 05. Weed mat Agriculture 06. Wagon cover Industrial 07. Fumigation cover Industrial/Agriculture 08. Azolla Bed Agricultur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f plastics and articles of other materials of heading 3901to 3914) 39269090 (others) 59(Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use) 5903(Textile Fabrics, Impregnated, coated, covered or laminated with plastics, other than those of heading 5902) 59039090 (others) Shakti Polyweave pvt. ltd. 2.Woven fabric ground cover obtained from strip of plastic less than 5 mm. 39 (Plastics and Articles thereof) 3923(Articles for the conveyance or packing of goods of plastics;stoppers, lids, caps and other closures, of plastics) 39232990 (others) 54(Man-made filaments; strip and the like of man-made textile materials) Heading 5407(Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404) 54072090 (others) Agriplast Tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of heading 5902 and the sub tariff item is classified as 59039090. They have also submitted a copy of the invoice bill of their competitor who is clearing the same goods under Chapter 59; that Tarpaulins made from HDPE woven fabric, are different from plastic tarpaulins and the former is derived by weaving method using power looms after textile processing(HDPE woven fabric), and the latter are hot pressed plastic sheets, cut to shapes and stitched(Tarpaulin). 8.2 The applicant has submitted that they are manufacturers of Weed mat (herein after PP woven fabrics W/B 130 GSM 4.2m x 100m ground cover obtained from strip of plastic less than 5mm product) under Chapter 39(Plastics and articles thereof) and Tariff items 3923(Articles for the conveyance or packing of goods of plastics, stoppers, lids, caps and other closures, of plastics) and sub-tariff items is 3923 2990(others); that with the supporting evidence under Chapter 54 of the GST, they propose to re-classify their product from Chapter 39 to 54 and the reclassification is to be done under the following heads: (a) Heading 5407(Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the submissions made by the applicant in their application for advance ruling as well as the arguments/discussions made by their representative Shri Dhaval Patel, C.S. at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 10. 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 similar provisions of the GGST Act. 11. Based on the submission of the applicant as well as the arguments/discussions made by the representative of the applicant during the course of personal hearing, we find that the main issue to be decided is the classification of the products (mentioned at para 8.3 above) manufactured by the applicant and the GST liability of the said products. In order to determine the tax liability on said goods, we will be required to refer to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l fabrics 5407 10 25 ---- Other nylon and polyamide fabrics of filament yarn 5407 10 26 ---- Polyester suitings 5407 10 29 ---- Other --- Dyed : 5407 10 31 ---- Parachute fabric 5407 10 32 ---- Tent fabrics 5407 10 33 ---- Nylon furnishing fabrics 5407 10 34 ---- Umbrella cloth panel fabrics 5407 10 35 ---- Other nylon and polyamide fabrics (filament) 5407 10 36 ---- Polyester suitings 5407 10 39 ---- Other --- Printed : 5407 10 41 ---- Parachute fabrics 5407 10 42 ---- Tent fabrics 5407 10 43 ---- Nylon furnishing fabrics 5407 10 44 ---- Umbrella cloth panel fabrics 5407 10 45 ---- Other nylon and polyamide fabrics(filament) 5407 10 46 ---- Polyester suitings 5407 10 49 ---- Other --- Other : 5407 10 91 ---- Parachute fabrics 5407 10 92 ---- Tent fabrics 5407 10 93 ---- Nylon furnishing fabrics 5407 10 94 ---- Umbrella cloth panel fabrics 5407 10 95 ---- Other nylon and polyamide fabrics of filament yarn 5407 10 96 ---- Polyester suitings 5407 10 99 ---- Other 5407 20 - Woven fabrics obtained from strip or the like : 5407 20 10 --- Unblea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 90 --- Other 11.4 Chapter Notes of Chapter 56 read as under: 1. This Chapter does not cover: (a) wadding, felt or nonwovens, impregnated, coated or covered with substances or preparations (e.g., perfumes or cosmetics of Chapter 33, soaps or detergents of heading 3401, polishes, creams or similar preparations of heading 3405, fabric softeners of heading 3809) where the textile material is present merely as a carrying medium; (b) textile products of heading 5811; (c) natural or artificial abrasive powder or grain, on a backing of felt or nonwovens (heading 6805); (d) agglomerated or reconstituted mica, on a backing of felt or nonwovens (heading 6814); (e) metal foil on a backing of felt or nonwovens (generally Section XIV or XV).; (f) Sanitary towels (pads) and tampons, napkins and napkin liners for babies and similar articles of heading 9619. 2. The term felt includes needleloom felt and fabrics consisting of a web of textile fibres the cohesion of which has been enhanced by a stitch-bonding process using fibres from the web itself. 3. Headings 5602 and 5603 cover respectively felt and nonwovens, impregnated, coated, covered or lam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs 5803 and 5806, the braids and ornamental trimmings in the piece of heading 5808 and the knitted or crocheted fabrics of headings 6002 to 6006. 2. Heading 5903 applies to: (a) textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square metre and whatever the nature of the plastic material (compact or cellular), other than: (1) fabrics in which the impregnation, coating or covering cannot be seen with the naked eye (usually Chapters 50 to 55, 58 or 60); for the purpose of this provision, no account should be taken of any resulting change of colour; (2) products which cannot, without fracturing, be bent manually around a cylinder of a diameter of 7 mm, at a temperature between 15oC and 30oC (usually Chapter 39); (3) products in which the textile fabric is either completely embedded in plastics or entirely coated or covered on both sides with such material, provided that such coating or covering can be seen with the naked eye with no account being taken of any resulting change of colour (Chapter 39); (4) fabrics partially coated or partially covered with plastics and bearing designs resulting from these trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar substances; (e) wood veneered on a backing of textile fabrics (heading 4408); (f) natural or artificial abrasive powder or grain, on a backing of textile fabrics (heading 6805); (g) agglomerated or reconstituted mica, on a backing of textile fabrics (heading 6814); or (h) metal foil on a backing of textile fabrics (generally Section XIV or XV). 6. Heading 5910 does not apply to: (a) transmission or conveyor belting, of textile material, of a thickness of less than 3 mm; or (b) transmission or conveyor belts or belting of textile fabric impregnated, coated, covered or laminated with rubber or made from textile yarn or cord impregnated, coated, covered or sheathed with rubber (heading 4010). 7. Heading 5911 applies to the following goods, which do not fall in any other heading of Section XI: (a) textile products in the piece, cut to length or simply cut to rectangular (including square)shape (other than those having the character of the products of headings 5908 to 5910), the following only: (i) textile fabrics, felt and felt-lined woven fabrics, coated, covered or laminated with rubber, leather or other material, of a kind use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. (v) Cutting: Next step of manufacturing is cutting of laminated fabric depending upon the requirement of the buyer. (vi) Stitching/Sealing: Further, Laminated fabric pieces are stitched on stitching machine. (vii) Printing: Next step of manufacturing process is the printing on laminated fabric pieces as per buyer requirement and thereafter Aluminium eyelet fitted depending on the requirements of the buyer. (viii) Packing/Final checking for Inspection/Store stuffing loading shipment: After above all process, finished products is ready for dispatch and after inspection of all parameters, the laminated plastic sheeting is ready for dispatch. 12.1 The applicant has submitted that they propose to re-classify their products namely: (i) pondliner, vermibed, weed mat, azolla bed, grow bags and agro shade net from Chapter 39 to sub-heading 54072090. (ii) PP ropes from Chapter 39 to the sub-heading 56074900. (iii) HDPE Tarpaulin, PE laminated fabric, wagon cover, fumigation cover, HDPE woven laminated fabrics and PP/HDPE woven fabric from Chapter 39 to sub-heading 59039090 and claim that they have supporting evidence for the same. However, on going through the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial, therefore, tapes made from this material would be covered as articles made. of plastics. This decision of the CEGAT was taken to the Supreme Court by the Union of India, but the appeal was dismissed on merits in C.A. No. 8369 of 83 dated 21-10-1983. Thereafter the Government of India issued Circular 32/85 - A.U. dated 20th November, 1985. In the Circular it was said that the Board had decided that HDPE woven sacks should be considered as articles of plastic and that the Tribunal's decision in Shellya Industries v. Collector, Central Excise (supra) can be accepted. This circular further said that in view of the dismissal of Government's appeal against CEGAT's order dated 30-12-1982 in M/s. Shree Radhe Industries v. Collector of Customs and Central Excise (supra) wherein the CEGAT has held that the HDPE tape is a plastic material, the tape shall fall in Tariff Item 15A(2) and not under Tariff Item No. 18. Therefore, in view of the aforesaid decisions on facts by the two Tribunals as confirmed by the Supreme Court and accepted by the Department there is no dispute that the HDPE woven sacks are articles of plastic. The learned Assistant Collector Central Excise, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DPE woven sacks are known as plastic woven sacks industry as is apparent from the annexures filed with the petition and the authenticity of which has not been disputed. The Dy. Director of the Ministry of Textile, Office of Textile Commissioner has, vide letter dated 2-3-1989 informed one of the petitioners that the HDPE/PP weaving activity on regular looms as well as circular looms manufacturing fall under the purview of DGTD and no installation permission or registration of circular looms is required under Textile (Control) Order, 1986. Therefore, the petitioner was advised to approach DGTD. The D.G.T.D. certificate is Annexure P-18 which has registered the Company of one of the petitioners for weaving HDPE woven sacks. As such the woven sacks are not treated as an item of textile by the Commissioner of Textiles and the DGTD (Plastic and Polymer Directorates) has registered it as an Industry producing HDPE woven sacks. The raw material used for the production of the HDPE strips is covered under Chapter 39 and in absence of anything on the record to show that the HDPE strips are synthetic textile material the only fact that their width is less than 5 mm would not automatically put ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 . Further the Hon ble High Court has also mentioned that the Central excise authorities had erred in concluding that since the strip is of less than 5 mm, therefore, it falls within 54.06 ignoring the fact that in addition to this there should be something to arrive at a conclusion that the aforesaid strip is of synthetic textile material, that if the strip is a strip of plastic only and not a synthetic textile material and is also known in the common parlance as a commodity of plastic, and the finished goods i.e. the HDPE woven sacks are also known in the common parlance as plastic woven sacks, then it cannot be held that the strips with which such bags are woven are the strips of synthetic textile material. Therefore it can be concluded that HDPE fabrics manufactured by the weaving of High Density Polyethelene (HDPE) tapes cannot be considered as textile material irrespective of the fact as to whether it is obtained by weaving method using power looms or hot pressed or is made from HDPE strip of width less tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (5) Vermibed is used for producing vermicompost, vermiwash used to reduce the farmers expenses on chemical fertilizers and provide an organic healthy crop. (6) Weed mats prevents weed seeds buried in the soil beneath from sprouting (7) Wagon covers: These are normally used for temporary structures where protection from sun and rain is required, usually for a shorter length of time, like Monsoon Sheds, Wedding Mandaps, etc. (8) Fumigation covers: To protect the food grains and cereals, superior quality of polythene sheets are used in a cover form shape and for the same, fumigation is done to kill the pest. Fumigation cover is used to provide safety to the wide gamut of agricultural products from rain, water, dust, heat and insecticides. (9) A growbag is a large plastic bag filled with a growing medium and used for growing plants, usually tomatoes or other salad crops. The growing medium is usually based on a soilless organic material such as peat, coir, composted green waste, composted bark or composted wood chips, or a mixture of these. (10) Agro shade nets: These nets are classified by the amount of sunlight tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven fabric would invariably be covered under heading 3926 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975). Further, looking to the use of Grow bags , we find that they would be rightly classifiable under Heading 3923. Heading 3923 and heading 3926 as appearing in the First Schedule to the Customs Tariff Act, 1975 reads as under: 3923 ARTICLES FOR THE CONVEYANCE OR PACKING OF GOODS, OF PLASTICS; STOPPERS, LIDS, CAPS AND OTHER CLOSURES, OF PLASTICS 3923 10 - Boxes, cases, crates and similar articles: 3923 10 10--- Plastic containers for audio or videocassettes, cassette tapes, floppy disk and similar articles 3923 10 20--- Watch-box, jewellery box and similar containers of plastics 3923 10 30 --- Insulated ware 3923 10 40 --- Packing for accommodating connectors 3923 10 90 --- Other - Sacks and bags (including cones): 3923 21 00-- Of polymers of ethylene 3923 29 -- Of other plastics: 3923 29 10--- Of poly (vinyl chloride) 3923 29 90 --- Other 3923 30 - Carboys, bottles, flasks and similar articles: 3923 30 10 --- Insulated ware 3923 30 90 --- Other 3923 40 00 - Spools, cops, bobbins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd heels; welts: 3926 90 31 ---- Of polyurethane foam 3926 90 39 ---- Other kg. --- Rings, buckles, tacks, washers and other decorative fittings made of plastic used as trimmings and embellishments for leather products; patterns for leather foot wear, leather garments and leather goods : 3926 90 41 ---- Of polyurethane foam 3926 90 49 ---- Other --- Retroreflective sheeting of other than of heading 3920 : 3926 90 51 ---- Of polyurethane foam 3926 90 59 ---- Other --- Hangers : 3926 90 61 ---- Of polyurethane foam 3926 90 69 ---- Other --- Plastic or nylon tipped hammers; insulating linerof nylon , HDPE : 3926 90 71 ---- Of polyurethane foam 3926 90 79 ---- Other 3926 90 80 ---- Polypropylene articles, not elsewhere specified or included --- Other: 3926 90 91 ---- Of polyurethane foam 3926 90 99 ---- Other 13.2 Chapter notes to Chapter 39 read as under: 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 infl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting fittings, illuminated signs,prefabricated buildings); (y) articles of Chapter 95 (for example, toys, games, sports requisites); or (z) articles of Chapter 96 (for example, brushes, buttons, slide fasteners, combs, mouth-pieces or stems for smoking pipes, cigarette-holders or the like, parts of vacuum flasks or the like, pens, propelling pencils). 3. Headings 3901 to 3911 apply only to goods of a kind produced by chemical synthesis, falling in the following categories: (a) liquid synthetic polyolefins of which less than 60% by volume distils at 3000C, after conversion to 1,013 millibars when a reduced pressure distillation method is used (headings 3901 and 3902); (b) resins, not highly polymerised, of the coumarone-indene type (heading 3911); (c) other synthetic polymers with an average of at least 5 monomer units; (d) silicones (heading 3910); (e) resols (heading 3909) and other prepolymers. 4. The expressions copolymers covers all polymers in which no single monomer unit contributes 95% or more by weight to the total polymer content. For the purposes of this Chapter, except where the context otherwise requires, copolymers (includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings 3920 and 3921, the expression plates, sheets, film foil and strip applies only to plates, sheets, film, foil and strip (other than those of Chapter 54) and to blocks of regular geometric shape, whether or not printed or otherwise surface-worked, uncut or cut into rectangles (including squares) but not further worked (even if when so cut they become articles ready for use). 11. Heading 3925 applies only to the following articles, not being products covered by any of the earlier headings of sub-Chapter II: (a) reservoirs, tanks (including septic tanks), vats and similar containers, of a capacity exceeding 300 l; (b) structural elements used, for example, in floors, walls or partitions, ceilings or roofs; (c) gutters and fittings thereof; (d) doors, windows and their frames and thresholds for doors; (e) balconies, balustrades, fencing, gates and similar barriers ; (f) shutters, blinds (including Venetian blinds) and similar articles and parts and fittings thereof; (g) large scale shelving for assembly and permanent installation, for example, in shops, workshops, warehouses; (h) ornamental architectural features, for example, fluting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s polymers of the same monomer units in the same proportions. 2. For the purposes of sub-heading 3920 43, the term plasticisers includes secondary plasticisers. 13.3 On going through the above, we find that Grow bags is classifiable under Sub-heading No.39232990. The other products namely HDPE Tarpaulin, PE laminated fabric, PP ropes, pondliner, vermibed, weed mat, wagon cover, fumigation cover, azolla bed, agro shade net, HDPE woven laminated fabrics and PP/HDPE woven fabric would be classifiable under Sub-heading No.39269099 of Chapter 39 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) as we do not find the specific mention of any of these products in any of the other sub-headings of Heading 3926. The details of the products and their classification are as mentioned in the table below: Sr.No. Name of the product Sub-Heading/Classification as per the First Schedule to the Customs Tariff Act, 1975(51 of 1975) 01. HDPE Tarpaulin 39269099 02. PE laminated fabric 39269099 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veyor, Plastic Tarpaulin. It is found that there is another entry No.45 in Schedule-IV of the said notification (wherein GST rate is 28%(14% SGST + 14% CGST)) which reads as under: Sr.No. Chapter / Heading / Sub-heading / Tariff item Description of goods 45. 3926 [other than 3926 40 11, 3926 90 10] Other articles of plastics and articles of other materials of headings 3901 to 3914 [other than bangles of plastic, PVC Belt Conveyor, plastic beads and plastic tarpaulins]. 14.1 Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 has been amended vide Notification No.27/2017-Central Tax(Rate) dated 22.09.2017 wherein the following amendments have been made: In Schedule-III (ii) in S. No. 111, in column (3), for the words Plastic Tarpaulin , the words, Plastic Tarpaulin, Medical grade sterile disposable gloves, Plastic raincoats , shall be substituted; In Schedule-IV (ii) in S. No. 45, in column (3), for the words, plastic tarpaulins , the words plastic tarpaulins, medical grade sterile disposable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cover 39269099 09. Azolla Bed 39269099 10. Grow bags 39232990 18%(9% SGST + 9% CGST) 11. Agro shade net 39269099 (i)28%(14% SGST + 14% CGST) upto 14.11.2017. (ii) 18%(9% SGST + 9% CGST) from 15.11.2017 onwards. 12. HDPE woven laminated fabrics 39269099 13. PP/HDPE woven fabric 39269099 15. In the light of the above, we rule as under : RULING The classification of the products manufactured and supplied by the applicant M/s. Gujarat Raffia Industries ltd., Ahmedabad (as per the First Schedule to the Customs Tariff Act, 1975(51 of 1975)) as well as the corresponding rate of GST(as per Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 (as amended from time to time)) is as detailed in the table below: Sr.No. Name of the product Classification as per ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
