TMI Blog2021 (9) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... Parts of Slide Fasteners. The product Zip Roll is classifiable under Tariff Item 9607 20 00 of the CTA, 1975 as Parts of Slide Fasteners in terms of the heading / sub - headings. As per Rule 1 of the General Rules of Interpretation of the CTA, 1975, classification is required to be determined according to the terms of the headings and any relative Section or Chapter Notes - Rule 2(a) of the General Rules of Interpretation is not applicable for classification of Zip Rolls in the present case. Thus, Zip Rolls being supplied by the appellant are appropriately classifiable under Tariff Item 9607 20 00 as Parts of Slide Fasteners. Rate of GST on Zip Rolls - HELD THAT:- Zip Rolls being supplied by the appellant were covered under entry 446 of Schedule - III of the Notifications from 01.07.2017 to 30.09.2019, attracting Goods and Services Tax of 18%. However, with effect from 01.10.2019, the said product Zip Rolls being supplied by the appellant is covered under entry 231B of Schedule - II of the Notifications and is attracting Goods and Services Tax of 12% - The description of goods at S. No. 231B of Schedule - II of Notifications during 26.07.2018 to 30.09.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (herein after referred to as the GAAR ), wherein details of products manufactured and supplied by the appellant, classification of those products as well as rate of GST applicable on those product, in the understanding of the appellant, were described as follows :- (i) Zip Rolls This product is supplied in continuous length as per customer order or of normal length as per industrial specification. In terms of the definition in HSN, the said products shall be classified as Slide Fastener under heading 9607 and rate of tax applicable is 12% in terms of Sl. No. 231B of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended by Notification No. 18/2018-Central Tax (Rate) dated 26.07.2018. (ii) Finished Zipper This product is supplied in cut length with sliders attached. In terms of definition in HSN, the said products shall be classified as Slide Fastener under Tariff Heading 9607 and rate of tax applicable is 12% in terms of Sl. No. 231B of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended by Notification No. 18/2018-Central Tax (Rate) dated 26.07.2018. (iii) Sliders The said product shall be classified as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the size of the zipper is fixed, the zippers are generally purchased by buyers in cut length along with slider. However, in case of bag manufacturers, since the size of the zipper is not fixed, they purchase Zipper Rolls which are cut by them in required lengths and then slider is affixed by them. Both the ends of the Zipper Rolls are fixed in the baggage, the slider is inserted in the Zipper Roll of the baggage, which functions to interlock or open and the Zipper Rolls works as a slide fastener. The appellant has submitted that the definition of Slide Fastener in HSN clarifies that the two narrow composite strips can be made to interlock by a slider or runner; that it does not specify that the Zipper Rolls should be cleared with the slider or runner, but it should work as slide fastener. The appellant has further submitted that the only difference between Zippers and Zipper Rolls is that while the Zipper is supplied in cut length along with Slider, Zipper Rolls are supplied in continuous length which can be cut in varying lengths by the buyer and it can be operated by a slider. 4.3 It has been submitted by the appellant that the GAAR has held Zippers to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terlocked by a machine. The appellant has submitted that the only reason why they are not cut into Zippers and fitted with sliders is that they are meant for buyers who do not use Zippers of fixed lengths and therefore the Zipper Rolls can be cut by them into required lengths and then fitted with sliders. 4.6 The appellant has submitted that despite the fact that the Zipper Rolls are supplied in continuous length without a slider, they completely fit into the description of Slide Fasteners as narrated in the Explanatory Note to the HSN and therefore the GAAR has erred in rejecting such classification. They relied upon the judgement of the Hon ble High Court of Madras in the case of Commissioner of Customs Vs. Hides [2009 (238) E.L.T. 398 (Mad.)]. 4.7 As an alternative submission, the appellant has submitted that the Zipper Rolls are ready for use as Zippers in all respect and they are sold in Roll form only because the buyers, mainly the bag manufacturers, do not have fixed measurement of Zipper that would be required. The appellant has further submitted that all that the buyer is required to do is to cut the Zipper Roll in required length and the same c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the GAAR. 7. The Advance Ruling was sought for by the appellant for appropriate classification and applicable rate of Goods and Services Tax for the products (i) Zip Rolls ; (ii) Finished Zipper ; and (iii) Sliders . The appellant has not challenged the Advance Ruling given in respect of the products Finished Zipper and Sliders . 8. Therefore, the issue involved in this case is limited to the proper classification of the product Zip Roll and the applicable rate of Goods and Services Tax on the said product. Classification of Zip Roll 9.1 As per explanation (iii) and (iv) of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, Tariff item , sub-heading heading and Chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the CTA, 1975. Further, it has been provided that 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. As submitted by the appellant, the Hon ble Supreme Court has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders or runners, end pieces, and narrow strips of any length mounted with chain scoops. 9.5 It is apparent that Chapter Heading 9607 at sub-heading level (at 6 digit level) is same in the CTA, 1975 and in Harmonised System of Nomenclature, though the sub-headings have further been divided in the CTA, 1975. Therefore, the Explanatory Notes can be relied to determine proper classification of the product under Chapter Heading 9607. Hon ble Supreme Court in the case of L.M.L. Ltd. Vs. Commissioner of Customs [Civil Appeal No. 3764 of 2003, decided on 21.09.2010 reported at 2010 (258) ELT 321 (S.C.)] has held that there can be no doubt that the HSN Explanatory Notes are a dependable guide while interpreting the Customs Tariff. 10.1 The appellant has described the manufacturing process of the Zip Roll , which has been reproduced at Para 4.1 above. 10.2 In the Explanatory Notes, Slide Fasteners have been described. It has been mentioned that most slide fasteners consist of two narrow strips of textile material one edge of each strip being fitted with scoops (of metal, plastics, etc.), which can be made to interlock by means of a slider or runner. It has also been ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Customs Vs. Hides [2009 (238) E.L.T. 398 (Mad.)] in support of the contention that Zip Rolls supplied in continuous length without a slider completely fit into the description of Slide Fasteners . 12.2 We have gone through the aforesaid judgement of the Hon ble High Court of Madras. In the said judgement, the Hon ble High Court of Madras has held as follows - 7. Sl. No. 294 of the Notification after referring the tariff Heading 56.01, 96.06 or 96.07, describe the goods which are exempted from payment of customs duty as Fasteners and poly wadding materials . Thus, as could be seen from the Notification, any fastener and poly wadding materials, which comes under the tariff Headings 56.01, 96.06, 96.07, are totally exempted from payment of customs duty. The Notification does not require the fastener should have a slider or scoop either metal or plastic as contended by the learned counsel for the department. If the intention of the department is that the exemption has to be granted only for fasteners with scoops or fasteners with the slider, in the exemption notification itself it would have been clearly stated slider fastener or fastener with scoop or fastener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of June, 2017 submitted by the appellant wherein Central Excise Tariff Sub-Heading 9607 11 10 has been shown by the appellant for the product Zipper Roll . However, we note that the assessees under Central Excise regime were required to determine the classification of the product and pay Central Excise Duty on self assessment basis. Such self determination of classification of any product and declaration by the assessee of such classification in Central Excise Invoices and Monthly Returns cannot be the basis for determination of correct classification of the product in the present proceedings before this authority. 14.1 The appellant has submitted that the Zip Rolls have the essential character of the Zipper and hence even by applying Rule 2(a) of the General Rules of Interpretation, the Zip Rolls would be classifiable under the entry for Slide Fasteners . 14.2 As per Rule 2(a) of the General Rules for the Interpretation of the CTA, 1975, any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore warrant the same classification under the entry of Slide Fasteners . 15.2 We have gone through the judgements relied upon by the appellant. In the case of S.R. Tissues Pvt. Ltd. [2005 (186) E.L.T. 385 (S.C.)], Hon ble Supreme Court held that the process of slitting / cutting of jumbo roll of plain tissue paper / aluminium foil into smaller size will not amount to manufacture under Section 2(f) of the Central Excise Act, 1944. Whether is there any manufacture when Tarpaulin sheets are stitched and eyelets are made? was the issue involved in the case of Tarpaulin International [2010 (256) E.L.T. 481 (S.C.)]. Again, the issue involved in the case of Tega India Ltd. [2004 (164) E.L.T. 390 (S.C.)] was whether fixing rubber linings on pipes, tanks and other such articles amounting to manufacturing dutiable goods ? Thus, all these judgements were pertaining to the issue whether some particular process amounted to manufacture in the context of section 2(f) of the Central Excise Act, 1944 and hence liable to Central Excise Duty. The issue of classification of product, and particularly, classification of Zip Rolls , was not the subject matter of any of these judgem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e covered under entry 446 of Schedule - III of the Notifications from 01.07.2017 to 30.09.2019, attracting Goods and Services Tax of 18% (CGST 9% + SGST 9%). However, with effect from 01.10.2019, the said product Zip Rolls being supplied by the appellant is covered under entry 231B of Schedule - II of the Notifications and is attracting Goods and Services Tax of 12% (CGST 6% + SGST 6%). 19. We have already discussed that the description of goods at S. No. 231B of Schedule - II of Notifications during 26.07.2018 to 30.09.2019 was slide fasteners , unlike the description of goods Fasteners and poly wadding materials in the Notification issued under the Customs Act, 1962. Therefore, the judgement of Hon ble High Court of Madras in the case of Commissioner of Customs Vs. Hides (supra) is not applicable in this case. On the contrary, the observations of the Hon ble High Court of Madras in the case of Commissioner of Customs Vs. Hides (supra) supports the view that Zip Rolls would not be covered under Sr. No. 231B of Schedule - II of the Notifications during 26.07.2018 to 30.09.2019 as the description of goods mentioned against the said entry was Slide fasteners . ..... X X X X Extracts X X X X X X X X Extracts X X X X
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