TMI Blog2022 (7) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... D. VERSUS STATE OF HARYANA [ 1978 (9) TMI 72 - SUPREME COURT] , it is found that it is very clear that the product in question in above case viz. dryer felts is made from cotton and wollen which is covered in the ambit of 'textile' and in present case Non-woven bags are made from polypropylene which is a type of plastic and on this ground alone it can be said that the above case law relied by appellant is not applicable in present case. Thus, the product in question viz. Polypropylene Non-woven bags merits classification under Chapter Heading 3923 of the HSN/Customs Tariff Act, 1975. - GUJ/GAAAR/APPEAL/2022/10 - - - Dated:- 12-7-2022 - MILIND TORAWANE AND SEEMA ARORA, MEMBER Present for the Appellant : Shri Paresh Sheth, (Advocate) At the outset we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the 'CGST Act, 2017' and the 'GGST Act, 2017') are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le under Heading 6305.3300 and therefore would prevail over the clarification issued by TRU vide Circular No. 80/54/2018-GST wherein polypropylene non-woven bags arc classified under Heading 3923 and attract 18% GST. The appellant also relied upon judgment of Supreme Court in case of Porritts and Spencers (Asia) Ltd V/s Stale of Haryana [1983 (13) ELT 1607 (S.C.)] wherein it was held that the word 'textile' would also cover the fabric manufactured through any material. 6. The Gujarat Authority for Advance Ruling (herein after referred to as 'the GAAR'), vide Advance Ruling No. GUJ/GAAR/R/63/2020 dated 17.09.2020, inter-alia observed that in view of Madhya Pradesh High Court Judgment in case of M/s Raj Packwell Ltd , fiber manufactured from polypropylene granules cannot be considered as textile in view of Textiles Committee Act, 1963 and hence classification of polypropylene non-woven bags under Heading 6305 is not correct. Further, the ruling of WB AAR relied upon by appellant is not applicable in provisions of Section 103 of CGST Act. GAAR also observed that in view of CBIC (TRU) Circular No. 80/54/2018-GST dated 31.12.2018. polypropylene woven and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, the decision of Appellate Advance Ruling Authority was pronounced after the clarification issued by TRU vide Circular No. 80/54/2018-GST dated 31.12.2018 and therefore would prevail over clarification. 7.3 The appellant submitted that GAAR erred in following the decision of Madhya Pradesh High Court in case of M/s Raj Pack Well Ltd as product under consideration before High Court was Woven Bags and therefore the said decision is not applicable in present case. The appellant further submitted that GAAR erred in following clarification issued by TRU, CBIC as the said clarification pertains to Non-woven bags laminated with BOPP and in Para 7.5 of said circular, it is specifically stated that non-laminated bags would merit classification as per their constituent materials. 7.4 The appellant submitted that GAAR ignored the fact that Director of DKTE Center of Excellence in Non Wovens clarified beyond doubt that polypropylene nonwoven is textile material and not plastic and therefore, the product manufactured from such material could never be classified as plastic material. The appellant further submitted that GAAR ignored that the Supreme Court, on similar issue, in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of their claim:- (i) Anuradha Processors V/s Commissioner of C.Ex. (2007(213) ELT 35], (ii) Tirupathi Non-woven Pvt Ltd Vs Commissioner of C.Ex. [2016 (10) TMI 646], (iii) Trade Notice No. 35/2001 dated 09.05.2001 issued by Commissioner of C.Ex., Vadodara, (iv) Onkyo Sight Sound India Ltd [2019 (368) ELT 683 (Tri-Chennai)], (v) Amit Cotton Industries [2019 (29) GSTL 200], (vi) Senthilkumar Thilagavathy [2019 (25) GSTL 145] and (vii) Claris Lifesciences Ltd Vs UOI [2014 (305) ELT 497 (Guj)] 9. During the course of personal hearing held on 31.05.2022, the advocate for the appellant reiterated the submissions made in the appeal dated 02.01.2021 and additional submissions made vide their letter dated 12.01.2022. The advocate for the appellant also submitted that they arc manufacturing non-woven non-laminated bags and the same should be classified under 6305. That GAAR has given no findings on the Section Note of Chapter 39. That GAAR has not considered their manufacturing process. That the product manufactured by them will fall, as described, under Para 7.5 of Board's Circular No. 80/54/2018-GST dated 31.12.2018. FINDIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Of man made textile materials: 6305.12 - Flexible intermediate bulk containers 6305.33 - Other, of polyethylene or polypropylene strip or the like 6305.19 - Other 6305.90 - Of other textile materials This heading covers textile sacks and bags of a kind normally used for 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 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 wrapping are roughly or loosely stitched together at the edges, but which do not constitute finished or unfinished sacks or bags, are excluded (heading 6307). 15. The GAAR held that Poly Propylene Non-Woven bag is classifiable under CTH 3923. The relevant chapter notes, tariff entry and HSN Explanatory note is given below: CHAPTER 39 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate 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. 16. We find that issue of classification of product viz. Poly Propylene Non-Woven bag is already covered in TRU Circular No. 80/54/2018-GST dated 31.12.2018. For reference, relevant portion of above said circular is reproduced below:- 7. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission that GAAR erred in holding that decisions of Advance Ruling Authority and Appellate Advance Ruling Authority is not binding on applicant under Section 103 of CGST Act without considering the fact that the Advance Ruling Authority and Appellate Advance Ruling Authority, as referred in their submission, have settled the law and confirmed the classification of polypropylene nonwoven bags under Chapter Heading 6305.3300 and same were of binding/persuasive in nature, we find that it is clearly mentioned in Section 103 of CGST Act, 2017 that Advance Ruling is applicable on the applicant who sought it as well as on the concerned jurisdictional officer in respect of same applicant. The appellant also submitted that Ruling of Advance Authority and Appellate Authority as mentioned in their submission was pronounced after issuance of TRU Circular and hence would prevail over the TRU Circular. We find that in view of Section 103 of CGST Act, 2017, Advance Ruling is binding only on the applicant who sought it and dismiss the interpretation of the appellant that the ruling passed would prevail over the Circular dated 13.12.2018 issued by TRU. We also find that the WBAAAR (West Bengal A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... textiles means any fabric or cloth or yarn or garment or any other article made wholly or in part of - (i) cotton; or (ii) wool; or (iii) silk; or (iv) artificial silk or other fibre, and includes fibre; Therefore, 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 . The definition of 'fibre' includes the regenerated cellulose, rayon, nylon and the like. 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'. Now in the Shree Radhe Industries case (supra) and the Shellya Industries case (supra) irrespective of the entries in the tariff 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 20-11-1985 also clearly says that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. 20. Thus, the view of the Textile Commissioner as discussed above, the registration by the DGTD of the factory of the petitioner, the definition of 'textile' and 'fibre' as discussed above, the process of the manufacture of the HDPE tapes, the earlier judgments of the CEGAT approved by the Supreme Court and accepted by the Department, all clearly go to show that the HDPE bags are the bags woven by the 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 the aforesaid HDPE woven sacks 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. 21. In the result we hold that HDPE strips or tapes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that textile means when yarn, whether cotton, silk, woolen, rayon, nylon or made out of any other material. To understand the findings of Supreme Court in above case, relevant portion is reproduced as under:- 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, rayon textile, nylon textile or any other kind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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