Classification of Imported Textile Rolls as Labels: Heading 58.07, Sub-heading 5807 10 20 Determination

The Authority for Advance Rulings classified the imported rolls made of Polyester, Taffeta, Satin, etc., as articles similar to labels of textile material in strips under Heading 58.07, specifically under sub-heading 5807 10 20. The effective duty rate was determined to be 16.5% (BCD: 10% + SWS: 10% + IGST: 5%), in accordance with applicable notifications and rates discussed.

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Issues Involved:
1. Classification of the proposed import of Rolls made of Polyester, Taffeta, Satin, etc.
2. Applicability of tariff entry and Customs/IGST notifications on the products proposed to be imported.
3. Determination of basic Customs duty and IGST rate on the imported products.

Issue-wise Detailed Analysis:

1. Classification of the proposed import of Rolls made of Polyester, Taffeta, Satin, etc.:
The applicant, engaged in the business of purchase and sale of products in India, proposed to import rolls made of Polyester, Taffeta, Satin, etc., with widths ranging from 10 mm to 810 mm. The applicant sought to classify these products under HSN Code 5807 10, arguing that the products are known as labels in common parlance and trade, with no alternate use except as labels. The jurisdictional Commissionerate, however, opined that the products do not qualify as labels under CTH 5807 10 since they do not bear individual inscriptions or motifs and are in running lengths without regular cut markings. Instead, the Commissionerate suggested classification under CTH 5806 32 00 for products made of man-made fibers and narrow woven fabrics of a width not exceeding 30 cm.

2. Applicability of tariff entry and Customs/IGST notifications on the products proposed to be imported:
The applicant argued that the products should be classified under CTH 5807 10 and be subject to Customs duty under Entry No. 147 of Notification No. 82/2017-Cus. and IGST under Entry No. 153 of Schedule II of Notification No. 1/2017-IGST (Rate). However, the jurisdictional Commissionerate noted that Notification No. 82/2017 had been rescinded w.e.f. 1-5-2022, making Entry No. 147 inapplicable. The Commissionerate also stated that since the goods do not fall under CTH 5807 10, Entry No. 153 of Schedule II of Notification No. 1/2017-IGST (Rate) is not applicable.

3. Determination of basic Customs duty and IGST rate on the imported products:
For narrow woven fabrics made of man-made fibers, the total duty rate was determined to be 28.10% (BCD: 20% + SWS: 10% + IGST: 5%). For woven fabrics other than narrow woven fabrics, the basic Customs duty and IGST rate would vary based on the composition and characteristics of the items imported. The applicant countered that the rolls should be classified under CTH 5807 10, subject to a basic Customs duty of 10% and IGST of 12% under Entry 153 of Schedule II of Notification No. 1/2017-IGST (Rate).

Judgment:
The Authority for Advance Rulings examined the contentions and submissions, including the jurisdictional Commissionerate's comments and the applicant's rejoinder. The Authority referred to HSN Explanatory notes and relevant case laws, including the Hon'ble Calcutta High Court's decision in M/s. Bijay Kumar Poddar v. Union of India, which held that plain label strips meant for printing with no alternate use should be classified under CTH 5807. The Authority concluded that the products in question, being similar to labels of textile materials in strips, merit classification under Heading 58.07, specifically under sub-heading 5807 10 20 of the First Schedule to the Customs Tariff Act, 1975. The effective rate of duty would be 16.5% (BCD: 10% + SWS: 10% + IGST: 5%), and the applicable notifications and rates of duty would follow as discussed.

Ruling:
The products detailed in Table-A are classified as articles similar to labels of textile material in strips under Heading 58.07, specifically under sub-heading 5807 10 20. The issues of operation of notifications and rate of duty will be applicable as discussed in the judgment.

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