TMI Blog2021 (3) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... terial. The product of the applicant namely Geo Membrane for Waterproof Lining fabrics (also referred to as Pond Liner) is classifiable under Sub-heading No.39269099 of Chapter 39 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) since we do not find the specific mention of this product in any of the other sub-headings of Heading 3926. Classification of the product namely Geo Membrane for Waterproof Lining fabrics(also referred to as Pond Liner) manufactured and supplied by the applicant was covered under Entry No.45 of Schedule-IV of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 (upto 14.11.2017) which read as 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] and during this period, the said product was liable to GST at 28%. However, Entry No.45 of Schedule-IV was omitted with effect from 15.11.2017 and Entry No.111 of Schedule-III of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 which read earlier as PVC Belt Conveyor, Plastic Tarpaulin was amended with effect from 15.11.2017 to read as Other articles of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n fabric, Warp and Weft tapes are loaded accordingly. These tapes are then passed through Machine Direction and Cross Direction accordingly to weave the fabric. (c) Film Extrusion: Film is manufactured from Polyethylene (PE) granules and required suitable UV stabilizer is added. Granules are then extruded through circular die to produce blowing film which further uniformly passed through take up roller to get the required film width micron. Tubular film is made on surface winder and it flattens with help of guide roller. (d) Lamination Coating: The HDPE woven fabric is laminated on both sides with LDPE with suitable combination of LLDPE. The coating film is UV stabilized by incorporating 2.5 + 0.5 per cent of carbon black with uniform dispersion. HDPE woven fabric is bonded with single side or both side LDPE coating. Similarly other side of the fabric is bonded together by sandwich lamination. For sandwich lamination, HDPE woven fabric is bonded with LDPE coating and LDPE liner film. The roll is ready for sealing process. (e) Sealing: Two or more pieces of geomembrane fabrics are used, the Geomembrane are joined/seamed together by a suitable heat air blower sealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or laminated with rubber, leather or other material, of a kind used for card clothing, and similar fabrics of a kind used for other technical purposes, including narrow fabrics made of velvet impregnated with rubber, for covering weaving spindles (weaving beams); (ii) bolting cloth; (iii) straining cloth of a kind used in oil presses or the like, of textile material or of human hair; (iv) flat woven textile fabrics with multiple warp or weft, whether or not felted, impregnated or coated, of a kind used in machinery or for other technical purposes; (v) textile fabrics reinforced with metal, of a kind used for technical purposes; (vi) cords, braids and the like, whether or not coated, impregnated or reinforced with metal, of a kind used in industry as packing or lubricating materials; (b) textile articles (other than those of headings 5908 to 5910) of a kind used for technical purposes [for example, textile fabrics and felts, endless or fitted with linking devices, of a kind used in paper making or similar machines (for example, for pulp or asbestos-cement), gaskets, washers, polishing discs and other machinery parts]. 5. The applicant has further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tern can be seen with the naked eye and the same fact is also confirmed by the concerned officer of SGST-Uttarakhand in his report dated 30.01.2020, therefore the product in question merit classification under Chapter 5903 of GST Tariff Act, 2017. 6. The applicant has submitted that they place reliance on the ration of the above judgement and also prayed to classify the said manufactured goods under HSN 59039090. They have asked the following question seeking Advance Ruling on the same: Whether the Geo Membrane for Water Proof Lining Fabrics which is technically Textile Fabrics made of strips and laminated/coated/covered/sheathed with plastics of width not exceeding 5mm and such impregnation/coating/covering/lamination can be seen with naked eye , can be classified as Textile Fabrics, Impregnated, coated, covered or laminated with plastics under HSN 59039090 with IGST @ 12% (CGST@6% + SGST@6%) OR Whether the Geo Membrane for Water Proof Lining Fabrics which is technically Textile Fabrics made of strips and laminated/coated/covered/sheathed with plastics of width not exceeding 5mm and such impregnation/coating/ covering/lamination can be seen with naked eye , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst 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. 10. We will therefore, be required to refer to the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) in order to find out the correct classification of the said products. Also, since the applicant in his question seeking Advance Ruling wants to know whether their product falls under 59039090 or 59119090, we find it imperative to refer to Headings 5903 and 5911 falling under Chapter 59 (Man-made filaments; strip and the like of manmade textile materials). Headings 5903 and 5911 read as under: 5903 TEXTILE FABRICS, IMPREGNATED, COATED, COVERED OR LAMINATED WITH PLASTICS, OTHER THAN THOSE OF HEADING 5902 5903 10 - With polyvinyl chloride : 5903 10 10 --- Imitation leather fabrics of cotton 5903 10 90 --- Other 5903 20 - With polyurethane : 5903 20 10 --- Imitation leather fabrics, of cotton 5903 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver 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 treatments (usually Chapters 50 to 55, 58 or 60); (5) plates, sheets or strip of cellular plastics, combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (Chapter 39); or (6) textile products of heading 5811; (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apes/strips are wound on bobbins for further processing. (b) Fabric weaving: HDPE woven fabrics are manufactured on Circular or Flat looms. As per design of woven fabric, Warp and Weft tapes are loaded accordingly. These tapes are then passed through Machine Direction and Cross Direction accordingly to weave the fabric. (c) Film Extrusion: Film is manufactured from Polyethylene (PE) granules and required suitable UV stabilizer is added. Granules are then extruded through circular die to produce blowing film which is further uniformly passed through take up roller to get the required film width micron. Tubular film is made on surface winder and it flattens with help of guide roller. (d) Lamination Coating: The HDPE woven fabric is laminated on both sides with LDPE with suitable combination of LLDPE. The coating film is UV stabilized by incorporating 2.5 + 0.5 per cent of carbon black with uniform dispersion. HDPE woven fabric is bonded with single side or both side LDPE coating. Similarly other side of the fabric is bonded together by sandwich lamination. For sandwich lamination, HDPE woven fabric is bonded with LDPE coating and LDPE liner film. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Chapter 39 of the Central Excise Tariff Act, 1985. The contention of the petitioners was not accepted by the Assistant Collector, Central Excise, Division Indore and he passed an order dated 11-11988 wherein it was held that the HDPE strips of an apparent width of 5 mm are classifiable under sub-head No.5406.11, of Polypropylene under Chapter sub-head 5406.90 and fabrics thereof under Chapter heading 5408.00. Relevant portions of the said judgement of the Hon ble High Court are reproduced hereunder: 16. Similarly the CEGAT Special Bench in the case of Shree Radhe Industries, Kalol v. Collector of Customs and Central Excise, Ahmedabad (1983 ELT 379) has held that since the HDPE tapes are neither man-made filament yarn nor cellulosic spun yarn, therefore, they do not fit into any category of Item 18 of CET. HDPE is a well known plastic raw material, 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 Nove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as prevailing then, it has been held that the HDPE sacks are articles made of plastic; they are made of high density polyethylene which is a plastic raw material and it has further been held that they are not man-made, filament yarn but are articles of plastic. The circular of the Central Board of Direct Taxes dated 20-1-1985 also clearly says that the Board has decided that so long as the finished articles of plastic is made out of plastic material falling under Tariff No. 15A(i), even if at the intermediate stage articles classifiable under Item No. 15A(ii) if any tariff item emerges, the said product would be considered to have been produced out of plastic material falling under Tariff Item No. 15A(i) and, therefore, the HDPE woven sacks should be considered as articles of plastic and that the Tribunal's decision be accepted . In common parlance also the HDPE 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/P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acks has to be classified as an Item under entry 39.20 of Chapter 39 and not under entry 54.06 of Chapter 54. Accordingly the entries of the finished goods have also to be made under the 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, Subheading 3920.32 of the Central Excise Tariff Act and not under heading 5406, subheading 5406.90. Similarly HDPE Sacks fall into Heading 3923, Sub-heading 3923.90.... 14. In the above decision Hon ble High Court of Madhya Pradesh has discussed what is textile according to 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 . 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is not a textile fabric as discussed earlier) and is thereafter coated or laminated with plastics, which the applicant claims, merits classification either under Heading 5903 or Heading 5911. In view of the above, we find that the decision cited by the applicant is not applicable to the issue in hand. Even otherwise, decisions of Advance Ruling Authorities cannot be relied upon by the applicant, since, as per the provisions of Section 103 of the CGST Act, 2017, the Advance Ruling pronounced by the Advance Ruling Authority or the Appellate Authority shall be binding only on the applicant who had sought it in respect of any matter referred to in sub-section(2) of Section 97 for Advance Ruling and the concerned officer or the jurisdictional officer in respect of the applicant. 16. Now, having concluded that the product manufactured by the applicant is an article of plastic which falls under Chapter 39 only, we find it necessary to go through the details of the product as well as their uses (available online) in order to decide about the classification of this product. The applicant have submitted in their submission that their product Geo Membrane for Waterproof Lining fabrics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plies of a kind classified as stationery other than pins, clips, and writing instruments : 3926 10 11 ---- Of polyurethane foam 3926 10 19 ---- Other --- Other : 3926 10 91 ---- Of polyurethane foam 3926 10 99 ---- Other 3926 20 - Articles of apparel and clothing accessories(including gloves, mittens and mitts) : --- Gloves : 3926 20 11 ---- Disposable 3926 20 19 ---- Non-disposable --- Aprons : 3926 20 21 ---- Of polyurethane foam 3926 20 29 ---- Other --- Plastic stickers for garments : 3926 20 31 ---- Of polyurethane foam 3926 20 39 ---- Other --- Collar stays, patties, butterfly, shoulder-padsand other stays : 3926 20 41 ---- Of polyurethane foam 3926 20 49 ---- --- Other : 3926 20 91 ---- Of polyurethane foam 3926 20 99 ---- Other 3926 30 - Fittings for furniture, coach work or the like : 3926 30 10--- Of polyurethane foam 3926 30 90 --- Other 3926 40 - Statuettes and other ornamental articles : --- Bangles : 3926 40 11 ---- Of polyurethane foam 3926 40 19 ---- Other --- Beads : 3926 40 21 ---- Of polyurethane foam 3926 40 29 -- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations 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 (other than collodions) consisting of any of the products specified in headings 3901to 3913 in volatile organic solvents when the weight of the solvent exceeds 50% of the weight of the solution (heading 3208); stamping foils of heading 3212; (f) organic surface-active agents or preparation of heading 3402; (g) run gums or ester gums (heading 3806); (h) prepared additives for mineral oils (including gasoline) or for other liquids used for the same purposes as mineral oils (heading 3811); (ij) prepared hydraulic fluids based on polyglycols, silicones or other polymers of Chapter 39 (heading 3819); (k) diagnostic or laboratory reagents on a backing of plastics (heading 3822); (l) synthetic rubber, as defined for the purpose of Chapter 40, or articles thereof; (m) saddlery or harness (heading 4201) or trunks, suit-cases, hand-bags or other containers of heading 4202; (n) plaits, wickerwork or other articles of Chapter 46; (o) wall coverin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the case may be, are to be classified in the heading which occurs last in numerical order among those which equally merit consideration. 5. Chemically modified polymers, that is those in which only appendages to the main polymer chain have been changed by chemical reaction, are to be classified in the heading appropriate to the unmodified polymer. This provision does not apply to graft copolymers. 6. In headings 3901 to 3914, the expression primary forms applies only to the following forms: (a) liquids and pastes, including dispersions (emulsions and suspensions) and solutions; (b) blocks of irregular shape, lumps, powders (including moulding powders), granules, flakes and similar bulk forms. 7. Heading 3915 does not apply to waste, parings and scrap of a single thermoplastic material, transformed into primary forms (headings 3901 to 3914). 8. For the purposes of heading 3917, the expression tubes, pipes and hoses means hollow products, whether semi-manufactures or finished products, of a kind generally used for conveying, conducting or distributing gases or liquids (for example, ribbed garden hose, perforated tubes). This expression also include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions: (a) where there is a sub-heading named Other in the same series: (1) the designation in a sub-heading of a polymer by the prefix poly (for example polyethylene and polyamide 6,6) means that the constituent monomer unit or monomer units of the named polymer taken together must contribute 95% or more by weight of the total polymer content; (2) the copolymers named in sub-headings 3901 30, 3903 20, 3903 30 and 3904 30 are to be classified in those sub-headings, provided that the comonomer units of the named copolymers contribute 95% or more by weight of the total polymer content; (3) chemically modified polymer are to be classified in the sub-heading named Other , provided that the chemically modified polymers are not more specifically covered by an other sub-heading; (4) polymers not meeting (1), (2) or (3) above, are to be classified in the subheading, among the remaining sub-headings in the series, covering polymers of that monomer unit which predominates by weight over every other single comonomer unit. For this purpose, constituent monomer units of polymers falling in the same sub-heading shall be taken together. Only the constituent co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 111. 3926 PVC Belt Conveyor, 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]. 20.1 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) Rate of tax(GST) 01. Geo Membrane for Waterproof Lining fabrics (also referred to as Pond Liner) 39269099 (i) 28%(14% SGST + 14% CGST) upto 14.11.2017. (ii) 18%(9% SGST + 9% CGST) from 15.11.2017 onwards. 21. Further, we would also like to rely on the decision of the Advance Ruling Authority, Gujarat in the case of M/s. Gujarat Raffia Industries, Ahmedabad decided vide Advance Ruling No.GUJ/GAAR/R/ 87/2020 dated 17.09.2020. In the said decision, a similar product manufactured and supplied by M/s. Gujarat Raffia Industries, namely Pondliner , was classified under Sub-heading 39269099 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) on similar grounds. 22. In the light of the above, we rule as under : RULING The classification of the product manufactured and supplied by the applicant M/s. Ananta Synthetic Innovations, Survey No.345, Ananda Viramgam Medaadraj road, Manipur, Kadi, Mehsana-382728 (as per the First Schedule to the Customs Tariff Act, 1975(51 of 1975)) as w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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