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of <h1>Imported woven textile rolls meant for label-making treated as 'similar articles' and classified under CTH 5807, attracting IGST</h1> Imported woven textile rolls intended for use as labels raised the issue whether they were classifiable under CTH 5807 (woven labels, badges and similar ... Classification of imported woven textile rolls - classifiable under heading 58.07 or under CTH 5807 1090 of the First Schedule to the Customs Tariff Act, 1975 and leviable to customs duty of 10%? - products are covered by entry no. 153 of Schedule II of N/N. 1/2017- IGST (Rate) 28 June 2017 or not - applicable IGST rate under sub- section (7) of Section 3 of the said Customs Tariff Act read with Notifications issued on import of the products. HELD THAT:- From the descriptions of the products, it is found that the same are of various type having sizes ranging from 10 mm to 305 mm. However, there is only one item in the list of products having width exceeding 300 mm, namely 'Nylon Taffeta Roll – 305mm'. There are a plethora of case laws/judgements cited by the applicant in furtherance of their case. The applicant has claimed that the impugned goods are made of woven materials and are not embroidered and that there is no alternative use of the products except as labels - it is found that the CTH 5807 specifically covers woven labels, badges and similar article. The Tuticorin Jurisdiction has contended that the subject goods do not have any inscriptions/motifs by weaving or painting/printing. Here it is observed that in the CTH 5807, in addition to labels, badges it also provides 'similar articles'. The applicant has claimed that the subject goods do not have other alternative uses other than printing of label/badges. It is pertinent to refer here the order passed by Hon'ble Calcutta High Court in the matter of M/s Bijay Kumar Poddar vs. UOI [1999 (9) TMI 106 - HIGH COURT AT CALCUTTA] relied upon by the applicant. The ratio of the judgement is applicable in this case. It is found that various courts in a plethora of cases have held that HSN explanatory notes have a guiding role in deciding the matters of classification. Keeping in view the observation of Apex Court in various decisions as well as the decision of High Court decision in case of M/s Bijay Kumar Poddar vs Union of India, it is found that the said products have to be considered as articles similar to labels of textile materials in strips and accordingly are classifiable under heading CTH 58.07. Thus, the Rolls made of Nylon Taffeta roll, Polyester Taffeta roll, Tearaway Taffeta roll, Iron on fusing Taffeta roll, Single side slit polyester satin roll, double side slit polyester satin roll, Single side woven edge polyester satin roll, Double side woven edge satin roll, Single side slit polyester cotton roll, Recyclable Single side slit polyester satin roll etc. which are available with width ranges from 10 millimetre to 305 millimetre more specifically described in as under in Table 'A' collectively referred to as 'Products' proposed to be imported by the applicant merit classification as articles similar to label of textile material in strips under CTH 5807 according to their constituting materials and design of the Customs Tariff. Accordingly, the subject goods as reflected in Table 'A' are classifiable at 8-digit level under CTI 5807 1010 (Of cotton), 5807 1020 (Of man-made fibre) & 58071090 (Other) according to their composition and characteristics - the 'products' are covered by entry no. 153 of Schedule II of Notification 1/2017 - IGST (Rate) 28 June 2017. Issues: (i) Whether the rolls described in Table A are classifiable under CTH 5807 (specifically sub-headings 5807 1010 / 5807 1020 / 5807 1090) of the First Schedule to the Customs Tariff Act and liable to basic customs duty applicable thereto; (ii) Whether the said products are covered by entry no. 153 of Schedule II of Notification No. 1/2017-IGST (Rate) dated 28 June 2017 (i.e., applicability of IGST as per that entry).Issue (i): Whether the products are classifiable under CTH 5807 10xx / 5807 1090.Analysis: The products are narrow woven rolls of widths 10 mm to 305 mm used as labels to bear trademark/wash-care and similar information. HSN explanatory notes for Chapter 58.07 cover labels and similar articles (in the piece, in strips or cut to shape or size, not embroidered) and include unprinted or plain strips known in trade as labels where no alternate use exists. Chapter Note 5 and explanatory notes for Chapter 58.06 exclude narrow woven fabrics that are more specifically covered by other headings such as woven labels under 58.07. Authorities and case law applying trade/common parlance and functional tests, along with GRI principles, support classifying articles by their function and trade understanding. The product characteristics and trade usage therefore align with heading 58.07 rather than the residual 58.06.Conclusion: The products are classifiable as articles similar to labels of textile material in strips under CTH 5807 at the 8-digit level (5807 1010 / 5807 1020 / 5807 1090) according to composition and characteristics.Issue (ii): Whether the products are covered by Entry No. 153 of Schedule II of Notification No. 1/2017-IGST (Rate) dated 28 June 2017.Analysis: Entry No. 153 of Schedule II applies to goods falling under CTH 5807 (as per the IGST notification cited). Since the products are held to fall within CTH 5807 as labels or similar articles, the notification entry addressing that heading is applicable to the described goods.Conclusion: The products are covered by Entry No. 153 of Schedule II of Notification No. 1/2017-IGST (Rate) dated 28 June 2017 and the IGST rate specified therein applies.Final Conclusion: The advance ruling determines that the rolls described in Table A are to be classified under Chapter Heading 58.07 (at 8-digit sub-headings 5807 1010 / 5807 1020 / 5807 1090 as applicable) and that the IGST entry specified at Entry No. 153 of Schedule II to Notification No. 1/2017-IGST (Rate) applies to the said goods.Ratio Decidendi: Where textile strips or rolls are, in trade and by function, labels or articles similar to labels and have no alternate use, they fall within Chapter Heading 58.07 (labels, badges and similar articles in the piece or in strips) and are to be classified accordingly; HSN explanatory notes, common parlance/functional tests and applicable GRI rules govern this classification.
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