TaxTMI 
TaxTMI 
2019 (1) TMI 420
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. QUESTIONS RAISED BEFORE THE AUTHORITY- In the application the applicant raised following question that "Determination of classification of sacks and bags made from man made textile materials under GST tariff No. 6305 which falls under Serial No. 224 of Scehdule-I of Notification No. FA3-33-2017-1-V (42) dated 29.06.17 issued vide Madhya Pradesh Gazette". However at the time of personal hearing the applicant himself admitted that the question raised was not very clear so amended the question as follow - "Determining the classification of P.P. Bags which are made from strips having width of less than 5mm. It is to be decided by the Hon'ble Advance ruling authority as to whether the aforesaid PP bags would classify under chapter heading 63 or chapter 39 of the GST Tariff and what shall be the rate of GST on the same". 4. DEAPRTMENT'S VIEW POINT: 4.1. The Deputy Commissioner (Tech), CGST & Central Excise Headquarters, Indore vide his letter C.No.l(Gen)30-08/18-19/GST/T dtd.14.12.2018 forwarded the opinion of CGST & Central Excise department on the issu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....entioned specifically in any of the Headings of Chapter 39, they are appropriately classifiable under Heading 39.26. This is also evident from the Explanatory Notes of HSN below Heading 39.26 wherein it is mentioned that "this Heading covers articles, not elsewhere specified or included, of plastic (as defined in Note I to the Chapter) or other materials of Heading 39.01 to 39.14. "It is also observed by the hon'ble CESATE that awnings which are specifically mentioned in Heading No. 63.06, if made of plastic, are classifiable under Heading 39.26 as Explanatory Notes of HSN." 6. Similarly, the Hon'ble High Court of M. P. in the case of M/s. Raj Packwell Ltd., V/s Union of India = 1989 (9) TMI 120 - MADHYA PRADESH HIGH COURT has held that: "In the Textiles Committee Act, 1963 (Act 41 of 63) the word fibre has been defined in Section 2 (a) as under: - "fibre" means man made fibre including regenerated cellulose rayon, roan, nylon and the like." "Textiles" has been defined in Section 2 (g) as under: - Textiles" means any fabric or cloth, or yarn or gannent or any other articles made wholly or in part of- (i) Cotton; or (ii) Wool; or (iii) Silk; or (iv) Artificial silk or o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e from strips having width of less than 5mm. It is to be decided by the Hon'ble Advance ruling authority as to whether the aforesaid PP bags would classify under chapter heading 63 or chapter 39 of the GST Tariff and what shall be the rate of GST on the same. 5.2 The Applicant in this context submitted that they have been manufacturing PP Strips of width less than 5mm which is used for manufacture of Woven fabrics on Knitting Machine. The said woven fabric is used for manufacture of PP bags/ Sacks. The goods are also registered as textile articles with the Textile ministry. Further in this context the following section notes, chapter notes and HSN Explanatory Notes are relevant : As per Notes given at Notification No. F-A3-33-2017-1-V (42) dt. 29.06.2017 - Explanation IV- The rules for the interpretation of the first Schedule to the Customs Tariff Act, 1975 (51 of 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. In view of above Explanation it is thus absolutely clear that for the purpose of classification the Customs Tariff Act, 1975 has to be resort....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No. F-A3-33-2017-1-V (42) dt. 29.06.2017 issued vide Madhya Pradesh Gazette covers under chapter 5405 and 5408 as Woven fabrics of manmade textile materials -. 5.9. As regard classification of PP bags, the Chapter 63 of HSN Explanatory Notes provides as under 63.05 - Sacks and Bags of a kind used for the packing of goods. 6305.10 - ............. 6305.20- of cotton - Of man-made textile materials: 6305.32 -- Flexible intermediate bulk containers 6305.33 -- Other, of polyethylene or polypropylene strip or the Like 6305.39 -- Other 6305.90 -- Of other textile material This heading covers textile sacks and bags of a kind normally used for the packing of goods for transport, storage or sale. 5.10 As per Chapter 63 of the Customs Tariff Act, 1975:- 6305 Sacks and bags, of kind used for the packing of goods 6305 10 - ..................... 6305 20 00 - Of cotton - Of man-made textile materials: 6305 32 00 -- Flexible intermediate bulk containers 6305 33 00 -- Other, of polyethylene or polypropylene strip or the Like 6305 39 00 -- Other 6305 90 00 -- Of other textile materials Also serial No. 224 of Notification No. F-A3-33-2017-1-V (42) dt. 29.06.2017 issued....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... practices for classification of plastic woven bags within the country. The Madhya Pradesh High Court in the case of M/s. Raj Packwell Ltd. = 1989 (9) TMI 120 - MADHYA PRADESH HIGH COURT held that such bags are classifiable as other articles of plastics under Chapter 39. This decision of Madhya Pradesh High Court relates to a period prior to 1990. Based on this, CBEC issued a classification circular dated 24.09.1992 directing classification of HDPE Tapes Strips and HDPE Sacks as classifiable under Chapter 39. Section XI Note 1 (g) states that strips of an apparent width exceeding 5mm of plastics fall under Chapter 39. Heading 54.04 specifically includes in the heading description "synthetic textile material of apparent width not exceeding 5mm". Note 2 (p) to Chapter 39 excludes textile and textiles article from Chapter 39. HSN Explanatory Notes 54.04 explains Synthetic Textile materials of apparent width not exceeding width 5mm as under:- "Strips and the like, of synthetic textile materials. The strips of this heading are flat, of a width not exceeding 5mm, either produced as such by extrusion or cut from wider strips or from sheets". Chapter Note 1A to Chapter 54 was inserted w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ans staple fibres and filaments of organic polymers produced by manufacturing process, either: (a) by polymerization of organic monomers to produce polymers such as polyamides, polyesters, polyolefins or polyurethanes, or by chemical modification of polymers produced by this process [for example, poly(vinyl alcohol) prepared by the hydrolysis of poly(vinyl acetate)]; or (b) by dissolution or chemical treatment of natural organic polymers (for example, cellulose) to produce polymers such as cuprammonium rayon (cupro) or viscose rayon, or by chemical modification of natural organic polymers (for example, cellulose, casein and other proteins, or alginic acid), to produce polymers such as cellulose acetate or alginates.- The terms 'synthetic' and 'artificial', used in relation to fibres, mean: synthetic: fibres as defined at (a), artificial: fibres as defined at (b). Strip and the like of heading 5404 or 5405 are not considered to be man-made fibres. The terms 'man-made', 'synthetic: and 'artificial' shall have the same meaning when used in relation to 'textile materials'. [1A. Notwithstanding anything contained in Note 1, man-made fibre such as polyester staple fibre and pol....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Warp Knitted Fabrics Technical Textile made up of man made synthetic yarn of width less than 5 mm. As per F.No.1(11)/2011/TTC/Vol.XX, dt.07.02.2012 written to the appellant by Assistant Director, Govt. of India, Ministry of Textiles, Office of the Textile Commissioner, Mumbai appellants unit has been registered as a technical textile unit in the records of the office of Textile Commissioner and has been allotted registration No.05152007. As per the Technical Textile literature issued by office of Textile Commissioner, Ministry of Textile, Govt. of India 'Agrotex' includes technical textile products used in Agriculture horticulture (incl. floriculture), fisheries and forestry. Example of Agrotex technical textile include Shed nets, mulch mats, crop covers, anti hail nets, brid protection nets, fisheries nets etc.' Further office of Joint DGFT Surat while issuing Authorisation No.5230009764 dt.15.11.2011 has held their product Warp Knitted Fabrics to be classifiable under ITCHS Code 60059000. As per Indian Standard ICS 59.080.70; 65.020.20 Agro Textiles-Shed Nets, for Agriculture & Horticulture purposes are fabrics made from plastic materials. 4. The opinions of the above special a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lanation IV- The rules for the interpretation of the first Schedule to the Customs Tariff Act, 1975 (51 of 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. We agree with the argument of the applicant being a matter of fact. In case of any dispute in classification of goods. the Rules of interpretation of first schedule to Customs Tariff Act 1975 will have to be resorted to. However, we also observe that the applicant has been classifying the impugned product under Chapter 39 since long, and no cogent reason, whatsoever, has been adduced by the Applicant which prompted them to suddenly contemplate a change in established classification. Be that as it may, once we have admitted the application, we would venture into the subject keeping in view the technicalities and also the available judicial pronouncements. 6.5 We note that the applicant has very strongly built its case on the basis of Advance Ruling order passed by the learned Authority for Advance Ruling West Bengal in case of M/s. Mega Flex Plastics Ltd. Vide order no. 09/WBAAW2018-19 dtd.06.07.2018 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ol; or (iii) Silk; or (iv) Artificial silk or other fibre, and includes fibre". Therefore, according to the above definition, any fabric or cloth or yarn or garment if made wholly or in part of cotton, wool, silk, artificial silk or other fibre shall be called textiles. The definition of 'fibre' includes the regenerated cellulose, rayon, nylon and the like. Nowhere in the aforesaid definition of 'fibre' or 'textiles' plastic has been mentioned as a commodity to be included in the definition of 'fibre' or textiles'. Now in Shree Radhe Industries case (1982 (12) TMI 213 - CEGAT NEW DELHI) and the Shellya Industries case (1983 (7) TMI 301 - CEGAT NEW DELHI) irrespective of the entries in the tariff as prevailing then, it has been held that the HDPE sacks are articles made of plastic; they are made of high density polyethylene which is a plastic raw material and it has further been held that they are not manmade. filament yarn but are articles of plastic. The circular of the Central Board of Direct Taxes dated 20.1.1985 also clearly says that the Board has decided that so long as the finished articles of plastic is made out of plastic material falling under Tariff No. 15A (i), even ....