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2018 (5) TMI 528
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....ct would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act/MGST Act would be mentioned as being under the "GST Act" 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus - 1) "M/S National Plastics (hereinafter referred to as the 'applicant') is a company engaged in the manufacture of floor mats made of PVC, known as PVC Carpet Mats, 2) Manufacturing of the same is undertaken in two stages. Stage I being PVC Monofilament production and carpet piling process and stage 2 being Web-lamination and backing process. The prime raw material being used for the aforesaid product is PVC (Poly Vinyl Chloride). The stages or manufacture are as follows: a) Under Stage 1, PVC monofilament yarn with decitex ranging from 1200 to 2800 and filament diameter range 0.38 to 0.75 mm is extruded through a perforated dis plate using T-die extrusion. Extrusion is done through 3 to 4 parallel rows along the entire width of T-die and the vertically extruded yarn immediately falls on a water bed ....
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.... to the Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification." Thus, for the purpose of GST, Classification of goods under any tariff item/ sub-heading / heading/ chapter shall be done using the general rules of interpretation of the First Schedule of the Customs Tariff Act, 1975 including the Section and Chapter Notes and the General Explanatory Notes to the HSN of the First Schedule of the CTA, 1975. It is submitted that the above explanation are also part of the notification 01/2017-State Tax (Rate) and thus the above ratio will apply to state notifications also. 5) In our view, Chapter Heading 5705 of the Customs Tariff, the heading of which reads as "other carpets and other textile floor coverings, whether or not made up" is the relevant entry in this case. The relevant extract is as follows: Tariff Item Description of goods Unit 5705 OTHER CARPETS AND OTHER TEXTILE FLOOR COVERINGS, WHETHER OR NOT MADE UP 570500 - Other carpets and other textile floor coverings , wheth....
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....r, the term 'carpets and other textile floor coverings" means floor coverings in which textile materials serve as the exposed surface of the article when in use and Includes articles having the characteristics of textile floor covering but intended for use for other purposes." It can be seen from the chapter note that Chapter 57 covers those carpets and floor coverings in which textile material serves as the exposed surface of the article. 8) The term 'textile' or 'textile material' is not defined in the GST Act. Therefore, reference can be taken from various Textile Dictionaries and Encyclopedia to ascertain the meaning of this term. a) "Encyclopedia of Textiles, Fibres and Nonwoven Fabrics" edited by Martin Grayson and published by Wiley-Interscience Publication has defined the term 'textile material' (Relevant extract attached as annexure B). This encyclopedia is another in the series of carefully selected reprints from the world-renowned Kirk-Othmer Encyclopedia of Chemical Technology, designed to provide specific audiences with articles grouped by a central theme. As a handy desk reference, it incorporates all the original articles related to textiles, fibers, and non....
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....on aliphatic polyamides olefin, based on polyolefins (polypropylene) polyester, based on polyester of an aromatic dicarboxylic and a dihydric alcohol spandex based on segmented polyurethane vinyon based on polyvinyl chloride based on inorganic substances glass metallic ceramic" b) Further, "Textile Terms and Definitions, Tenth Edition" (copy attached as annexure C) published by the Textile Institute has also defined the term 'textile'. The Textile Institute is an international organisation governed by a Council representing members throughout the world. It is legally constituted by a Royal Charter, granted in Britain in 1925. The main central functions are the provision of an operational framework and the maintenance of quality, particularly in regard to professional qualifications and the spread of information to members and others. The term 'textile' as per this publication is defined as follows: "A textile was originally a woven fabric, but the terms textile and the plural textiles are now also applied to fibres, filaments and yarns, naturals and manufactured and most products for which these are a pri....
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....g 5603 are reproduced below: "A nonwoven is a sheet or of predominately textile fibres oriented directionally or randomly and bonded These fibre may be of natural or man-made again. They may be staple fihres (natural or manmade) or man-made filaments or be formed in situ. Thus, textile fibres can be of natural or man-made origin. As per HSN explanatory notes to chapter 54, man-made fibres are defined as follows: The General Explanatory Note to Section XI should be taken into account in reading the Explanatory Note to this Chapter. Under note 1 to chapter 54, the term ";man-made fibres", when used in chapter 54 and 55 or elsewhere in the Nomenclature, means filaments or staple fibres composed of organic polymers produced by manufacturing processes, either by: (1) Polymerisation of organic monomers or chemical modification of the resulting polymers (see the General Explanatory Note to the Chapter 39) (synthetic fibres); or by (2) Dissolution or chemical treatment of natural organic polymers, or chemical modification of natural organic polymers (artificial fibres). (1) SYNTHETIC FIBRES The basic material for the manufacture of these fibres are generally d....
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....ntry number 146 in notification no. 1/2017-CT(Rates) applies only to product where cotton predominates by weight. Since the product for which classification is under dispute is not made up of cotton, it will not be classified under entry number 146. The description of entry number 146 In notification no 1/2017-CT(Rate) is reproduced below: Other carpets and other textile floor coverings, whether or not made up; such as Mats and mattings including Bath Mats, where cotton predominates by weight of Handloom, Cotton Rugs of handloom It can be seen that the mats and mattings where cotton is predominant is placed after the use of semi-colon. The applicant relies on the following judgments wherein has been held that when two sentences are separated by a semi-colon, they have to be read disjunctively: a) Heidelberg Cement (India) Ltd. 2014 (8) TMI 251 - CESTAT Mumbai b) Mc Dowell Co. Ltd. 1997 (94) ELT 215 (Tribunal) = 1997 (5) TMI 149 - CEGAT, NEW DELHI Therefore, in the present case, since semi-colon has been used, the condition of predomination of cotton will only apply to mats and mattings, including bath mats covered by the clause after use of semi-colon. It has b....
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....)= 1992 (11) TMI 171 - CEGAT, NEW DELHI approved by the Supreme Court in the Trimurti Weldmesh (P) Ltd. 1996 (82) E.L.T. A168 (S.C.) = 1995 (12) TMI 397 - SUPREME COURT 4) There is no res-judicata in taxation. It has been contended in para 6 of the departmental submission made during the hearing that in the pre-GST period the applicant was classifying the product under chapter heading 39249090 and thus now why is the applicant classifying the product under Chapter heading 5705. It is submitted that the applicant was under the impression that the product would be classifiable under chapter heading 3924. However, it was lately realised that the main ingredient in the product is PVC fibre which is a textile material. Detailed submission on the same has been made in the advance ruling application. Thus, the applicant now wants to obtain the ruling from the authority for ascertaining the correct classification. It is submitted that there is no principle of estoppel in taxation. The applicant relies on the case of MICRO TIPS PV., LTD. 1998 (104) E.L.T. 76 (Tribunal)= 1998 (6) TMI 195 - CEGAT, NEW DELHI wherein the CESTAT has held that the principle of estoppel and res judication....
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....plication, the applicant was asked to produce any bill of entry for import of similar products made by sister concern/third parties. The applicant hereby submits, as annexure 1, bill of entry number KMTCTA03067382 dated 26/10/2017 for import of artificial turf by sister concern M/s. Rayzon Global LLP. The corresponding packing list and purchase invoice is attached as annexure 2 The bill of entry clearly mentions the item as artificial turf (made of plastic raw material). The product has been classified under chapter heading 57033090 which covers CARPETS AND OTHER TEXITLE FLOOR COVERINGS, TUFTED, WHETHER OR NOT MADE UP. It is submitted that artificial turfs also made up of PVC fibres but is sewed on the backing fabric with the help of-specialized multi-needle sewing machines. This process is called tufting. Therefore, the product is classifiable under chapter heading 5703. However, in the case of product under dispute in the present case, there is no tufting carried out. In the present case, the PVC fibres are extruded and the pile is then bonded on to the backing material with the help of adhesives, Thus, the product is classifiable under chapter heading 5705." 03. CONT....
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....ically extruded yarn immediately falls on a water bed to form a non-woven carpet pile. Also, referred to as PVC web, non-woven carpet pile is taken up in a horizontal direction on a roller and wound up in rolls. Pile height of the carpet can he varied by changing the process parameters. usually in the range of 8mm to 16mm. b) Under stage 2, the web formed in Stage 1 is impregnated with a lamination of clear coat liquid PVC and is further made to fall over the liquid PVC layer on a conveyor belt. Then it passes through the heated conveyor oven to solidity the liquid PVC backing to web. c) The resultant product is a product of running length. It is then cut into size as given specified by the customer. However, it is not coming out from the above reasoning as to what is their product/product-range and how the same merits classification under chapter heading 5704. 3. As per the GST Tariff, the products which are classifiable under 5705 have been clearly mentioned as "other carpets and other textile floor covering, whether or not made up [such us mats, & mattings including bath Mats, where cotton predominates by weight, of handlooms, cotton rugs handlooms]". From the ....
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....his stage only. Additional Written Submissions or NIL date as received on dt. 05.03.2018 In addition to the submissions made on the application of M/s. National Plastic Industries Ltd., in respect of advance ruling, the department would like to make the following submissions, 1] The applicant has not submitted any written submission with reference to this office earlier submission dt. 06.02.2018. 2] At the time of hearing, the applicant were requested to submit any bill of entry for import of similar products made by sister concern/third parties,- In response to this, they have submitted the bill of entry No. KMTCTA03067382 dt. 26.10.2017 for import of artificial turf by sister concern M/s. Rayzon Global LLP. The product has been classified under CH 57033090 which covers carpets other textile floorings, Tufted, whether or not made up. It is submitted by them that artificial turfs also made up of PVC fibres but is sewed on the backing fabric with the help of specialised multi-needle sewing machine. This process is called tufting. Therefore, the product is classifiable under CH 5703. However, they have further stated that in the subject case, to th....
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.... - CEGAT, NEW DELHI iii] Jalal Plastic industries 1981 (8) ELT 653(Guj) = 1980 (12) TMI 51 - HIGH COURT OF GUJARAT AT AHMEDABAD iv] M/s. Varroc Engineering Pvt. Ltd. 2015 (10) TMI 54-CESTAT Mumbai It is observed that the applicant's intention is that the mats and mattings with predomination of cotton is only an example. Also, there is one more product mentioned i.e. cotton rugs of handloom. Thus, cotton rug is a separate item and the predomination of cotton does not apply to such article. Therefore, it can be interpreted that the predomination of cotton will only apply to mats and mattings, including bath mats. Therefore, by way of the example, the scope of the 'other textile floor coverings' cannot be restricted. However, on going through the decisions of the above case laws, it is found irrelevant with above referred case, as the decisions of these cases are based on the facts of the said cases. 5] The applicant has failed to provide samples of each products with all the details so that relevant facts of each products would he analysed in the light of existing GST Law and applicability of any other case law under erstwhile Central Excise Regime. 6] The applicant ha....
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....of the case. The product before us is claimed to be a floor mat. Though at the cost of repetition, for immediate reference we go through the manufacturing process once again - a) Under Stage 1, PVC monofilament yarn with decitex ranging from 1200 to 2800 and filament diameter range 0.38 to 0.75 mm is extruded through a perforated dis plate using T-die extrusion. Extrusion is done through 3 to 4 parallel rows along the entire width of T-die and the vertically extruded yarn immediately falls on a water bed to form a non-woven carpet pile. Also, referred to as PVC web, non-woven carpet pile is taken up in a horizontal direction on a roller and wound up in rolls. Pile height of the carpet can be varied by changing the process parameters, usually in the range of 8 mm to 16 mm. b) Under Stage 2, the web formed in Stage 1 is impregnated with a lamination of clear coat of liquid PVC and is further made to fall over the liquid PVC layer on a conveyer belt, Then it passes through the heated conveyor oven to solidity the liquid PVC backing to the web. c) The resultant product is a product of running length. It is then cut into Size as specified by the customer. As can be seen, the....
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....s thereof, of Chapter 39. The impugned product is not only impregnated but also coated with PVC, which is a plastics of Chapter 39. And this is also admitted by the applicant when it is submitted that - the web formed in Stage 1 is impregnated with a lamination of clear coat of liquid PVC and is further made to fall over the liquid PVC layer on a conveyer belt. The present product is made from PVC only and there should be no doubt whatsoever that the same would fall in Chapter 39 which covers PVC, a polymer and articles thereof. Having seen thus, there arises no occasion for us to discuss the Heading 5705 which is claimed as being applicable. The case laws being buttressed in respect of the applicability of the Heading 5705 also need no discussion as to their applicability or otherwise. However, we would like to observe herein that we are not at all disagreeable to the point that there are man-made textiles but the same are not required to be referred to here in view of the impugned product being clearly classifiable under Chapter 39 as per discussions held hereinabove. Now as can be seen that the applicant's query is in respect of the classification of the PVC floor mat and ....