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TMI Blog2023 (2) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the Government of India, Ministry of Finance being Annexure - P-9 to the Writ Petition as unconstitutional and secondly, for setting aside the impugned order dated 25th October, 2018, passed by the West Bengal Appellate Authority for Advance Ruling. Main issue involves in the instant writ petition relates to a classification disputes of the product in question and refusal by the authority concerned to consider the petitioner's prayer for allowing it to change the classification of Tariff head of its same product under the Central Excise Tariff Act after introduction of the GST Act, 2017. Facts involve in brief in the instant case as appears from relevant records are as hereunder: Petitioner is a manufacturer of Polypropylene Leno Bags by weaving polypropylene strips (tapes). Polypropylene is a variety of plastic. The major raw material in manufacture of PP Leno Bags is plastic granules. Petitioner, before the introduction of the Goods and Services Tax Act, 2017, had voluntarily declared its finished product under the Chapter Heading 3923 29 90 of the Central Excise Tariff Act, 1985 and enjoyed the Duty Drawback. No cogent reason has been shown by the petitioner as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80/54/2018-GST dated December 12, 2018 clarifying that Polypropylene Woven and Non-woven Bags and PP Woven and Non-woven Bags laminated with BOPP would be classified as plastic bags under HS Code 3923 and would attract 18% GST. It is to be specifically recorded that petitioner in course of hearing of this writ petition did not press for its prayer in the writ petition relating to challenging the constitutional validity of the aforesaid circular. Relevant portion of the impugned order of the Appellate Authority for Advance Ruling reversing the order of the Authority for Advance Ruling particularly Paragraph Nos. 7-12 of which are relevant are as follows: "7. The respondent submitted copies of the reports of test conducted by the Central Institute of Plastics Engineering & Technology, Haldia, dated 15.03.2018, the Indian Institute of Packaging, Kolkata, dated 27.03.2018 and Indian Oil Corporation Ltd., Panipat dated 12.03.2018 on his samples of PP Woven Leno Bags. These test reports are based on samples provided by the respondent. It is also seen that in the reports of Central Institute of Plastics Engineering & Technology and the Indian Institute of Packaging i.e. Test Reports da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offered as to why the Tariff Heading should be changed now to 6305 33 00, it is not permissible under the doctrine of equitable estoppels that the respondent is allowed to take such a divergent stand now. The Apex Court has consistently struck and Investment Corporation and Anr. -Vs- Diamond and Gem Development Corporation Ltd. and Anr., AIR 2013 SC 1241. 12. In view of the above discussion, we set aside the Advance Ruling No. 09/WBAAR/2018-19 dated 06.07.2018 pronounced by the West Bengal Authority for Advance Ruling in the matter of M/s. Mega Flex Plastics Ltd., and order that the item Polypropylene Leno Bags (PP Leno Bags) manufactured by the respondent, be classified under Tariff Heading 3923 29 90. The appeal filed by the Assistant Commissioner, CGST & CX, Division, Howrah Commissionerate thus succeeds and is allowed." Crux of the argument of the petitioner in support of its claim for changing the head of classification for the purpose of tariff rate for its product Polypropylene strips (tapes) is that though it is manufactured from plastics since it is less than 5mm in width as such it should be treated as textile product while the very same product manufactured havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articles thereof' whereas the Chapter-63 of the Tariff Act covers 'Other made up textile articles, sets, worn clothing and worn textile articles, rags'. Sacks and bags under Chapter Heading 39 of the Tariff Act are the plastic articles. HDPE bags are the bags woven by the plastic strips and thereof, the said products are the product of plastic and the material is made from plastic granules. As such, the HDPE strips fall under the Chapter Heading 3920 subheading 3920.32 of the Central Excise Tariff Act and not under the Heading 6305 33 00. Similarly, HDPE sacks fall into the heading 39.23. Before introduction of the GST regime, the rate of Duty under the Tariff Heading 3923 29 90 and 6305 33 00 both were 12.5%. however, in present regime of GST the rate of tax under the Tariff Heading 3923 29 90 is 18 % and under the Tariff Heading 6305 33 00 it is 5% or 12% depending upon the sale value of the products whether exceed Rs.1000/- per piece or not. By Circular No. 80/54/2018-GST dated 31st December, 2018, the Board only clarified the classification of the Polypropylene Woven and Non-woven Bags under Chapter Heading 3923 as the finished goods which is manufactured from HDPE strips as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 3923. Hence, the impugned goods are clearly classified under Chapter heading 3923. It is pertinent to mention that the Note 2 (p) of the Chapter 39 of GST Tariff (Plastics and Articles thereof) does not cover the goods of Section XI (Textile & Textile Products). In the instant case, the impugned product, by no stretch of imagination, could be termed as Textile or Textile Products. Therefore, unless the impugned goods have been manufactured from the material which qualifies as Textiles under Chapter 63, it would not be proper to consider the same to be classified under Chapter 6305 33 00. Further, Section Note 1 (h) of Section XI of the Tariff Act, specifically excludes: "woven, knitted or crocheted fabrics, felt or non-wovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of Chapter 39;" According to the West Bengal Advance Ruling Authority while deciding the issue in favour of the writ petitioner, it failed to take note of the decision in the case of Raj Pack Well Limited -Vs- Union of India, reported in 1990 (50) E.L.T. 201 (M.P.). The Appellate Authority of the West Bengal Advance Ruling, after considering the materials on record and after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith BOPP would be classified as plastic bags under HS code 3923 and would attract 18% GST. (vii) In the case of Texbond Non-wovens reported in 2021(49) G.S.T.L (A.A.R-GST-Puducherry) the Appellate Authority for Advance Ruling under GST, Puducherry, has held that goods/articles covered under Chapter 39 cannot be classified under any of the chapters falling under Section XI as Textile and Textile articles by virtue of Note 1(h) of Section XI and consequently, the item "polypropylene Non-woven bags" is classifiable under HSN Code 3023 29 90 an taxable at 18%. (viii) In the case of Appropriate Authority and anr. -Vs- Sudha Patil (Smt) and anr. Reported in 1998 (8) SCC 237 the Hon'ble Supreme Court has held that merely because no appeal is provided for against the order of the Appropriate Authority, the Supervisory power of the High Court does not get enlarged nor can the High Court exercise an appellate power. (ix) In the case of Collector of Customs, Madras -Vs- K. Ganga Setty reported in AIR 1963 Supreme Court 1319 the Hon'ble Supreme Couurt has held that if there were two constructions which an entry could reasonable bear and one of which was in favour of revenue was adopte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Commercial Taxes, Trivandrum reported in 2017 (352) E.L.T 113 (S.C) to substantiate that in interpreting a taxing statute entries which have technical meaning to be looked into and commercial and nomenclature or trade understanding to such term and further submitted that the said decision relied upon by the petitioner is not applicable in this case. And that in a taxing statute there is no room of any intendment and regard must be had to clear meaning of the words used therein and the matter should be governed only by its language. As decided in the case of Bharati Telecom Ltd.- Vs- Commissioner of Customs reported in 2001 (134) E.L.T 327 (SC). Moreover, a fiscal statute must be construed strictly. In this regard respondent relied upon the decision of the Hon'ble Allahabad High Court on the case reported in 2019 (20) G.S.T.L 46 (All). Furthermore, the decision in the case of Parle Agro (P) Ltd. has been considered by the Appellate Authority of Advance Ruling in the case of RLJ Woven Sacks Pvt. Ltd. reported in 2019 (22) G.S.T.L 120 (App. A.A.R-GST wherein the Appellate Authority of Advance Ruling after considering the same has ruled in favour of the Revenue by hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability of levy of entry tax. Though the Department wanted to put it under entry 55 schedule but could not satisfy by any cogent material or evidence in support of its contention. Therefore, the Court observed that the burdened shifted on revenue. (iv) Further the decision of the Hon'ble Supreme Court in the case of Hewlett Packard India Sales Pvt. Ltd. -Vs- Commissioner of Customs passed in Civil Appeal No. 5373 of 2019 relied upon by the petitioner is also not applicable in this case. In the referred case the Department sought to change the classification of the goods which classified earlier by the assessee of its own and there the Department failed to discharge their burden of proof to classify the goods differently. In the instant case, the fact is just reverse here the petitioner wants to change the classification of the goods without any reason whatsoever and contrary to the tariff Heading of the Fiscal Statute which clearly is in favour of the Department and supports the impugned order of West Bengal Appellate Authority of Advance Ruling. (v) The decision in the case of CTO, Anti Evasion, Circle III, Jaipur -Vs- Prasoon Enterprise reported in 2019 (23) G.S.T.L 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns relied upon by them and the reasons and findings recorded in the impugned order by the Appellate Authority for Advance Ruling, I am not inclined to grant any relief in this writ petition for the following reasons: (i) Merely because no further appeal is provided for or against the impugned order of the Appellate Authority for Advance Ruling the scope of interference under the jurisdiction under Article 226 of the Constitution of India cannot be enlarged and the findings of the Appellate Authority cannot be substituted unless the same is without jurisdiction or there is violation of principle of natural justice or the order is patently contrary to any specific provision of law which factors for invoking constitutional writ jurisdiction of this Court are absent in the instant case. (ii) This Court in exercise of its jurisdiction under Article 226 of the Constitution of India is not inclined to allow the petitioner to change the classification of Tariff Heading to avail lower rate of Tariff under GST regime when admittedly the product of the petitioner is Polypropylene Leno Bags manufactured by weaving Polypropylene strips and the major raw material of which is plastic granule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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