Classification of cut-length polyester filament as brush material denied concessional IGST, with residuary rate upheld.

Cut-length polyester filament imported for paint brushes was not synthetic or artificial filament yarn for the concessional 12% IGST rate under Notification No. 35/2017-Integrated Tax (Rate). The goods, though declared under CTH 5404, were found to be long synthetic monofilaments in cut pieces meant as brush material, not continuous yarn suitable for textile end use. Applying the meanings of monofilament, multifilament yarn and yarn, the CESTAT held that the goods fell outside the concessional description and were covered by the residuary 18% IGST entry under Notification No. 1/2017-Integrated Tax (Rate).

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Issues: Whether polyester filament in cut lengths imported for paint brushes was classifiable as synthetic or artificial filament yarn so as to attract IGST at 12% under Notification No. 35/2017-Integrated Tax (Rate) dated 13.10.2017, or whether it fell in the residuary category attracting IGST at 18% under Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017.

Analysis: The applicable notification provided 12% IGST only for synthetic or artificial filament yarn, while all other goods under the relevant tariff headings attracted 18%. The imported goods were declared under CTH 5404 but were found to be cut pieces of polyester filament meant for making paint brushes, not continuous yarn suitable for textile end products. On the basis of the meaning of monofilament, multifilament yarn, and yarn, the imported goods were held to be long synthetic monofilaments in cut length and not synthetic or artificial filament yarn. The Tribunal therefore rejected the claim that the goods qualified for the concessional 12% rate.

Conclusion: The appellant was not entitled to IGST at 12% and the demand based on 18% IGST was upheld.

Ratio Decidendi: Concessional IGST under the relevant notification is available only to goods that are in fact synthetic or artificial filament yarn, and cut-length monofilaments used as brush material do not fall within that description.

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