Polyester and nylon rolls with printable features classified under CTH 5807 as textile material labels

The AAR Mumbai held that rolls made of polyester, nylon taffeta, and satin with width ranges from 10-810 millimeters having printable features are classifiable under CTH 5807 as articles similar to textile material labels in strips. The authority relied on HSN explanatory notes and HC precedent in applicant v. Union of India case. The products fall under sub-heading 5807 1020 of the Customs Tariff Act, 1975, and are covered by entry 153 of Schedule II of Notification 1/2017-IGST (Rate) dated 28 June 2017.

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Issues Involved:
1. Classification of Rolls made of Polyester, Nylon Taffeta, Satin, etc.
2. Applicable IGST rate for the imported products.

Issue 1: Classification of Rolls made of Polyester, Nylon Taffeta, Satin, etc.
The applicant, M/s. Mean Light Co., sought an advance ruling on the classification of various rolls made of polyester, nylon taffeta, satin, etc., which are available in widths ranging from 10 millimeters to 810 millimeters. The applicant proposed that these products be classified under CTH 580710 of the First Schedule to the Customs Tariff Act, 1975, which attracts a customs duty of 10%.

The applicant argued that the products are labels or similar articles of textile materials in strips, used for marking wearing apparel and other goods. They cited various case laws, including the ruling in the case of M/s. Mahaveer Impex and the decision of the Calcutta High Court in the case of M/s. Bijay Kumar Poddar vs Union of India, which supported the classification under CTH 580710.

The Chennai Customs House, however, contended that the products in roll form do not have inscriptions or motifs to qualify as labels and suggested alternative classifications under headings 5806, 5407, 5512, 5903, 6003, 6005, or 6006, depending on the nature of the fabric and its coating.

Issue 2: Applicable IGST Rate
The applicant also sought clarification on the applicable IGST rate for the imported products. They proposed that the products fall under entry no. 153 of Schedule II of Notification 1/2017 - IGST (Rate) dated 28 June 2017, which prescribes an IGST rate of 12% for goods falling under HSN 5807.

Judgment Summary:
The Customs Authority for Advance Rulings (CAAR) examined the arguments and submissions made by the applicant and the response from the Chennai Customs House. The CAAR referred to the HSN Explanatory Notes to CTH 5807, which cover labels of any textile material, including those used for marking wearing apparel and other goods, provided they are not embroidered. The CAAR also considered the exclusion clause under CTH 5806, which excludes narrow woven fabrics more specifically covered by other headings, such as woven labels.

The CAAR concurred with the applicant's submissions and the ruling in the case of M/s. Mahaveer Impex, concluding that the products in question are classifiable under sub-heading 5807 1020. The CAAR ruled that the products are articles similar to labels of textile materials in strips and are correctly classified under CTH 5807 1020. The CAAR also confirmed that the products are covered by entry no. 153 of Schedule II of Notification 1/2017 - IGST (Rate) 28 June 2017, attracting an IGST rate of 12%.

Conclusion:
The CAAR ruled that the Rolls made of Polyester, Nylon Taffeta, Satin, etc., available in widths ranging from 10 millimeters to 810 millimeters, are classifiable under sub-heading 5807 1020 of the First Schedule to the Customs Tariff Act, 1975, and are covered by entry no. 153 of Schedule II of Notification 1/2017 - IGST (Rate) 28 June 2017, with an IGST rate of 12%.

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