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TMI Blog2022 (3) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... nclatures like Agro-textiles, Geo-grid Fabrics, and the like. However, the products are basically in the nature of fabrics, and they are used for water proofing in ponds, and for agricultural applications. 3.2 Manufacturing process (a) The basic raw materials for manufacturing Geomembrane is High Density Polythene Granules (HDPE Granules) and Master Batch containing carbon black. These raw materials are melted in Extruder by applying heat and friction, and they are extruded in form of thin sheet, in molten form. Such thin sheet in molten stage is passed through a quenching tank containing water, to form a solid thin sheet, which is then slit into tapes/strips. Such slit tapes/strips are passed through hot plate for orientation process so as to impart strength. The width of such tapes/strips is below 5 mm, and they are wound on metal pipes for producing bobbins. (b) These tapes/strips are then loaded on circular looms or flat looms for weaving purpose. By employing weft and warp method of weaving, woven fabrics are produced by using the tapes/strips of width below 5 mm. These are uncoated woven fabrics of plastic; and such fabrics in rolls are further processed for producing coat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mers. Production per unit area is high in biofloc system. v) The stocking destiny of animals in Geomembrane lined biofloc pond is twice the density of an ordinary unlined pond. vi) Aquaculture ponds using Biofloc technology can bring big benefits to aquaculture farmers. 4. Tarpaulin M/s. Texel has submitted manufacturing process of coated/laminated HDPE Poly-woven Tarpaulin. 4.1 Manufacturing process (a) The basic raw materials are HDPE granules and master batch; and for manufacturing Tarpaulin also, tapes/strips having width less than 5 mm are produced and then fabric is woven on circular looms or flat looms utilising these strips by employing weft and warp method of weaving, and uncoated fabrics products on such looms are subjected to coating/lamination of both the sides, one after another, like in the case of Geomembrane. After such coating/lamination on both the sides and sealing as well as overlap sealing to increase width of the fabrics and cutting in length to get the required size, the finishing process for Tarpaulin involves hemming of size and ends with rope to give required strength to the product and for preventing tearing from the edges. Such hemmed fabric is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s coated, covered or laminated with rubber, leather or other material (e.g. plastics) used for technical purposes. iii Thus, Textile products and Textile fabrics for technical uses are covered under the above classification, subject to Note-7 of this Chapter. M/s. Texel therefore submits that Geomembrane and Tarpaulin would fall for classification under this Heading/Sub Heading if they were textile products and textile fabrics, subject to other requirements like use for technical purposes. But the terms Textile and Fabric are not defined under the Tariff, though the expression textile fabrics is clarified under Note-1 of Chapter 59 as the expression applicable only to the woven fabrics of Chapters 50 to 55 and Headings 5803 and 5806 etc. A perusal of Chapters 50 to 53 and Headings 5803, 5806, 6002 to 6006 referred to in Note No.1 of Chapter 59 also shows that the terms Fabrics or Textile are not defined or clarified thereunder. iv Since Heading 5911, Sub Heading 59111000, is for Textile products and articles, and Textile fabrics coated, covered or laminated and used for technical purposes, it would be relevant to find out what is "Textile products and articles" and "Textile fab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ics; lace and crocheted goods. The expression fabric is explained in Fairchild's Dictionary as a cloth that was woven, knitted, braided, netted, felted or pleated with any textile fibre, or was a bonded web. 9.1. Further, submits that the expression Weave is explained in this dictionary as "the method or process of interlacing two yarns or similar materials so that they cross each other at right angles to produce woven fabric. The warp threads or ends run lengthwise in the fabric, and filling threads (weft or picks) run from side to side". 10. Texel submits that Hon'ble Gujarat High Court has rendered a judgement in case of M/s. CTM Technical Textiles Ltd. V/s. Union of India - Special Civil Application No.8332/2020, after considering the judgement of the Hon'ble Supreme Court in case of Porritts & Spence (Asia) Ltd. and the dictionary meaning of the terms Textile, Fabrics etc. In the judgement rendered on 24.12.2020, the Hon'ble Gujarat High Court has considered a dispute of classification of two products, namely, Geo-grid and Agro Shed Net. The Revenue's stand that these goods were articles of plastic because they were made of HDPE tapes and also the Revenue's reliance on judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falling in any other Heading of Section-XI". Clause (b) of Note-7 provides for inclusion of textile articles of a kind used for technical purposes under Heading 5911. 14. Texel further submits that products in question are textile goods i.e. textile articles in view of the law laid down by the Hon'ble Supreme Court and also by the Hon'ble Gujarat High Court, and also considering the meaning of textile in textile technology as well as in common parlance. Textile articles include textile fabrics, because textile fabrics are specified at Sub Heading 59111000 of the Tariff. By virtue of Note-7(b) of Chapter 59, Geomembrane and Tarpaulin both are covered under Heading 5911. Texel has emphasized that both the products are admittedly textile fabrics, and both are coated or laminated with plastic; and both the products are used for technical purposes like water proofing of Ponds and lining of fields for agricultural applications in case of Geomembrane, and for packing and protecting the goods in transportation etc. in case of Tarpaulin. Waterproofing application is undoubtedly a technical purpose or a technical use. Packing is also a technical purpose or a technical use, and packing is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods like Floor coverings with jute base in Heading 5904, Insulating tape and electrical of cotton in Heading 5906, Fabrics covered partially or fully with textile flocks in Heading 5907, Wicks and gas mantle fabrics in Heading 5908, Textile hose piping and similar textile tubing in Heading 5909, and Transmission or conveyor belts or belting of textile material in Heading 5910 shows that the goods classified thereunder are not mere textile fabrics, that is to say, fabrics brought into existence only by weaving method/s. This Heading Nos. 5904 to 5910 are for classifying products which were not textile fabrics, but they were textile fabrics processed further, and subjected to other operations. It is thus clear that there is a distinction between textile fabrics (which may be impregnated, coated or covered) on one hand, and goods obtained by subjecting textile fabrics to further operations and processes on the other hand. 17.1 Further submits that Heading 5911 specifically refers to Textile products and articles, for technical uses, specified in Note-7 to this Chapter. The broad description of the goods therein makes it clear that the goods classified under Heading 5911 of the Tarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle. 22. Texel further submits that both the products in question, namely, Geomembrane and Tarpaulin are produced by subjecting textile fabrics to further operations and processes, and therefore they are in the nature of textile products and articles meriting classification under Heading 5911 of the Tariff. Products and Articles for technical uses 23. Texel submits that Textile products and articles for technical uses are classified under Heading 5911. The term technical uses is not defined under the Tariff, nor anywhere else like Dictionaries of English language, Dictionary for Scientific and Technical Words or the Law Lexicon. Note-7 of Chapter 59 is referred to under Heading 5911; and therefore a general idea could be gathered from Note-7 about what type of textile products and articles were for technical uses. But in Note-7 also, a few products and article are specifically referred to under Clause (a), whereas Textile articles of a kind used for technical purposes are separately referred to under Clause (b), while giving a few examples of such textile articles. Texel submits that various types of goods like Bolting cloth, Straining cloth of a kind used in oil presses etc. ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to unknown or unthought-of. Woven fabrics of strip and the like of HDPE is also woven fabrics under Heading 5407 of the Tariff, because they are woven out of materials of Heading 5404. Such fabrics are textile fabrics by virtue of Note-1 of Chapter 59, and also in view of the law laid down by the Hon'ble Supreme Court as well as the Hon'ble Gujarat High Court in the above referred cases. The operations like overlap sealing, stitching, cutting and sealing edges, affixing eyelets, etc. are the operations/processes undertaken by M/s. Texel on textile fabrics for producing Geomembrane and Tarpaulin. Uses of these products are not ordinary uses of textile fabrics, but both the products are used for technical purposes, and therefore they are products most appropriately falling under Heading 5911, Sub Heading 59111000, because such textile products and articles are used for technical purposes. 26. Texel vide letter Nil dated received on 1-10-21submittedas follows: i. Ministry of Textile vide Not. No. 12015/03/2020-IT dated 24-9-21 implemented a production linked incentives scheme for textiles in order to provide incentives to the textiles manufacturer. In Annexure-III to the Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f is the most appropriate classification for both the products like Geomembranes and woven tarpaulin and the application to be admitted for Advance Ruling. 29. Question on which Advance Ruling sought 1. Whether the product, namely, Geomembranes merits classification under Heading 5911, Sub Heading 59111000 or Sub Heading 59119090, as Textile products, coated, covered or laminated with plastic, used for technical purposes? 2. Whether woven Tarpaulin manufactured by M/s. Texel merit classification under Heading 5911, Sub Heading 59111000 or Sub Heading 59119090, as Textile products, coated, covered or laminated with plastic, used for technical purposes? Personal Hearing 30. Personal hearing granted on 18-2-22 was attended by Shri Pratik Trivedi, CA and Shri Anuj Sharedalal, CA and they reiterated the submission. Shri Pratik Trivedi reiterated the case laws submitted in the written submission of H'ble Gujarat High Court case law of M/s. CTM Textiles and decision of H'ble Apex Court in Porritts and Spencer. It was further submitted that the decision of Raj Packwell is not applicable to the present case. Findings 31. At the outset, we would like to state that the provisions of bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature has empowered competent authority vide Section 168 CGST Act, 2017 with the power to issue Instruction or directions as per the GST scheme of law. As per CGST Act and rules framed thereunder, we do not find Textile Ministry empowered under GST scheme of law to issue directions/ instructions for GST Classification. 37. We note that M/s Texel has cited Notification dated 24-9-21 issued by Ministry of Textiles to further their view to classify subject goods. 38. We note that the H'ble Delhi High Court in Greatship (India) Ltd. vs UOI- 2016 (338) ELT 545 (del) has held that in Interpretation of statutes, for Conflict of views between two Central Government Ministries -In such case, view taken by Ministry that is primarily responsible for policy in question, should prevail. By applying the same ratio, we find it in compliance to judicial discipline and in consonance to the laid ratio decidendi as cited, that in matters of GST Classification, we comply with the General Rules of Interpretation for GST Classification and GST Scheme of Law. Further reference to HSN explanatory Notes has persuasive value. What we intend to express is that GST Scheme of law shall be given precedence an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extile fabrics, felt and felt line woven fabrics, coated, covered or laminated with rubber, leather or other materials, 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);...(iv) Flat Woven textile fabrics with multiple warp of weft whether or not felted, impregnated or coated, of a kind used in machinery or for other technical purposes.' 39.2. Construing the wordings of Chapter Note 7(1)(a) to Chapter 59 that textile fabrics coated with 'other materials' used for technical purposes are included in this Chapter, we hold that the goods Geomembrane, though coated with Plastic but used for technical purposes finds place in the Tariff 5911, for the dual reason that the phrase 'other materials' used in this Tariff is vast to include plastics also; coupled with the technical use of Geomembrane. 39.3. Thus, in light of the following: technical uses of Geomembrane, Geomembrane passing the test of Section note XI(1)(g) to Section XI, Geomembrane satisfying the test of Chapter 59 Note 7(1)(a) and by applying the Doctrine of Harmoniou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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