2026 (2) TMI 243 - AAR - Customs

Plastic decorative wall panels classified as plastic sheets under 3921, not builders' ware, due to removable decorative character

Classification dispute over polymer wall panels turns on GRI interpretation and Chapter Notes: applying Rule 1 and the essential character test, the ... Classification under Heading 3921 as plates, sheets, film, foil and strip of plastics - Builders' ware under Heading 3925 - Chapter Note 10 to Chapter 39 (scope of plates, sheets and exclusion for 'further worked' articles) - Chapter Note 11(b) and 11(h) to Chapter 39 (builders' ware; structural elements and ornamental architectural features) - General Rules for Interpretation - Rule 1 and Rule 3(a) - Essential character test for tariff classification - HELD THAT:- The material facts placed on record describes these goods as manufactured from polymers such as polyvinyl chloride, polystyrene and polyurethane, presented generally in the form of rectangular sheets or panels of standard sizes. While certain items are plain sheets with surface treatment such as embossing, printing or UV coating, others are moulded or provided with profiled, interlocking edges for installation on walls or ceilings. The intended use of all these products, as highlighted by the applicant, is for interior decorative purposes in residential and commercial buildings. It is settled principle of law that the classification of any good under Customs Tariff Act, 1975 is governed by the General Rules for the Interpretation of the Import Tariff. Further, Rule 1 of GRI stipulates that “classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes.” It is only when the headings and notes do not require otherwise then one may proceed to the subsequent rules. The department’s assertion regarding “permanent installation” is untenable and contradicts the actual method of application. These panels are not permanently installed but are temporarily attached to walls through pasting or screwing methods. The installation is so temporary that panels can be removed by hand without damage to the underlying wall structure. The temporary nature of attachment, combined with the ease of removal, clearly distinguishes these products from permanent construction elements and reinforces their character as decorative wall coverings, However, on careful examination and after examining submission of the applicant in response to the Commissionerate’s comments, I find that- The interlocking edges incorporated into certain panel varieties serve exclusively aesthetic purposes, specifically designed to create groove appearances that enhance visual appeal and ensure seamless visual continuity between adjacent panels during installation and too minimize the usage of small mini size screws. The departmental understanding that PVC wall panels are engineered products is not based on correct understanding as all one piece of PVC wall panel, having features such as surface texturing/interlocking edges are extruded/formed simultaneously in a single manufacturing/extrusion process moulded through specially designed dies and cannot be worked upon to add features like interlocking edges because any attempt to mill or shape cured PVC would result in cracking, chipping or deformation of the material. In view of the above, I note that the profiled and engineered interlocking edges are not the result of “further working” but are integral to the original extrusion die design. This demonstrates as a qualifying criterion to classify PVC Wall Panel under HSN 3921. These products serve as substitutes for paint and wallpaper, designed exclusively for aesthetic enhancement rather than structural construction and are in the nature of decorative overlays applied to walls rather than structural components of walls themselves. The mere fact that a product is used on walls does not make it a “structural element used in walls.” The category contemplates products that are integral to the wall structure itself, not decorative overlays applied to finished walls. I find these PVC panels remain essentially decorative sheets designed for aesthetic wall covering as a substitute of paint & wall papers, temporarily in nature and easily removable, lacking structural function, architectural complexity, or permanent integration into building frameworks. The correct classification under CTH 3921 reflects both the goods’ essential character as plastic sheets and their commercial understanding as decorative wall coverings. In view of above, I do not find force in the department’s argument. As per the applicant’s submission, flutings are vertical grooves carved into columns or pilasters, serving both structural purposes to strengthen columns and ornamental purposes in classical architecture. Cupolas are small, dome-like structures on roofs, often used for ventilation, light, or as bell towers. Dovecotes are specialized structures for housing pigeons or doves. In this regard, I find that flutings, cupolas, dovecotes are complex, three-dimensional architectural elements with specific functions and design requirements. They are not simple flat panels but are intricate structures that form distinctive architectural features of buildings. The products under consideration are simple rectangular decorative panels with surface patterns such as stone textures, wood grain effects, or 3D designs. Moreover, I find that these products are used for “interior decoration purposes” and to “enhance the aesthetic appeal of domestic or commercial spaces.” which is precisely the function of decorative wall coverings, not architectural features. In view of above, I do not find force in the department’s argument. The products retain the essential form of plates/sheets of plastics within the meaning of Note 10 to Chapter 39. The longitudinal interlocking/tongue-and-groove at the edges is an in-line extrusion profile and, on these facts, does not amount to “further working” of the type exemplified in the Chapter and explanatory notes (e.g., drilling, milling, framing, twisting, cutting into non-rectangular shapes). The HSN EN to 3921 explicitly embraces cellular and reinforced/laminated/supported sheet products that remain plates/sheets and are not covered by 3918/3919/3920 or Chapter 54. The subject panels fit that description. Thus, I hold that the following goods mentioned in application are classifiable under heading 3921 of the Customs Tariff; goods of polymers of styrene in the sheet/panel form fall under 39211100; goods of polymers of vinyl chloride in the sheet/panel form fall under 39211200; goods of polyurethanes in the sheet/panel form fall under 39211390; and other plastics or sheets retaining the character of plates/sheets fall under 39219029, subject to verification of the actual composition, structure (cellular/non-cellular; reinforced/laminated/supported) by the field formation in this regard. Issues: Whether the goods described as PS moulding, PS wall panels, 3D PVC panel, PVC panel, PVC sheet, PVC accessory, PU wall panel, PU panel, PU corner, WPC panel and PU moulding are classifiable under Heading 3921 of the Customs Tariff Act, 1975 (plates/sheets of plastics) or under Heading 3925 (builders' ware of plastics).Analysis: The decision applies the General Rules for Interpretation (including GIR 1 and GIR 3(a)), Chapter Note 10 and Chapter Note 11 to Chapter 39, and the HSN Explanatory Notes. The goods were examined for physical form, manufacturing process, extent of working, edge profiles/interlocking features, intended use, and commercial understanding. Chapter Note 10 restricts Headings 3920/3921 to plates, sheets, film, foil and strip of regular geometric shape that are uncut or cut into rectangles/squares and not further worked, while permitting surface working (for example embossing, printing, corrugation) and inclusion of cellular or reinforced sheets under Heading 3921. Chapter Note 11 and the explanatory notes to Heading 3925 list specific categories of builders' ware (including structural elements and ornamental architectural features) and operate as a residual provision subordinate to more specific headings. The materials that are plain rectangular sheets or cellular/reinforced sheets whose profiling and edge features are formed in-line during extrusion preserve their essential character as plates/sheets and fall within Heading 3921. Where panels retain rectangular geometric character, are produced by a single extrusion process (with surface working and integral edge profiles) and are primarily decorative overlays removable without impacting building stability, they do not attain the status of structural building elements or ornamental architectural features envisaged by Note 11 and Heading 3925. The analysis distinguishes surface-working and integral extrusion profiling from further post-formation working (drilling, milling, cutting into non-rectangular shapes) that would exclude Heading 3921. Commercial understanding and relevant precedents favour classification under Heading 3921 for such decorative sheets/panels.Conclusion: The goods specified, insofar as they are plates/sheets or cellular/reinforced sheets of plastics presented in regular rectangular form and retaining the essential character of sheets (including those with in-line extruded interlocking/profiles and surface-working), are classifiable under Heading 3921 of the Customs Tariff Act, 1975: polymers of styrene under 39211100; polymers of vinyl chloride under 39211200; polyurethanes under 39211390; and other plastics/sheets under the appropriate 3921 subheading, subject to field verification of composition and structure.