AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 768
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....ling Regulations, 2018. 1. Admissibility of the Application 1.1 The Applicant, stated to be a manufacturer of fusible interlining cloth seeks a ruling on whether it is classifiable in Chapters 50 to 55 of the First Schedule of the Customs Tariff Act, 1975 (hereinafter the Tariff Act) or under Heading 5903 of the Tariff Act. 1.2 Advance Ruling is admissible on this question under Section 97(2) (a) of the GST Act. 1.3 The Applicant further submits that the question raised in the Application is neither decided by nor pending before any authority under any provisions of the GST Act. The concerned officer from the Revenue does not object to the admission of the Application. 1 .4 The Application is, therefore, admitted. 2. Submissions of the Applicant 2.1 The Applicant submits that fusible interlining cloth is partially coated with plastic which is used for shirt collars, cuffs, pant belts etc. This partial coating of plastic leads to dotted patterns/designs on the fabric. 2.2 A specimen of the fabric is tested by the National Test House, Govt of India. The test certificate confirms that one side of the sample is coated with polyethylene, and the other non-coated side resembles c....
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....3. The applicant refers to the judgment delivered by a single bench of the Madras High Court in the case of Madura Coats [2004 (163) ELT 164 (Mad)] = 2003 (9) TMI 98 - MADRAS HIGH COURT, which struck down the aforesaid circular being ultra vires and contrary to section 37B of the Central Excise Act, 1944. 2.8 In Madura Coats (supra) the court holds that a bare perusal of the aforesaid provisions makes it clear that but for Chapter note 2(c), which was introduced under the Finance Act, 1989, such fusible interlining would be coming within Chapters 50 to 55 and only by virtue of introduction of Chapter note 2(c) to Chapter 59 such fusible interlining would be coming within the scope of Chapter 59.03. Once such Chapter Note 2(c) was omitted under the Finance Act, 1995, it is evident that the position which was available prior to the introduction of such Chapter Note 2(c) revives. In such background, the court observes that issuance of the Circular is clearly against the statutory provisions. 2.9 The Applicant also refers to the order dated 30/01/2019 of the AAR, Uttarakhand, in the case of Goodswear Fashion Pvt Ltd [2019 (23) GSTL 154] = 2019 (3) TMI 836 - AUTHORITY FOR ADVANCE RULI....
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.... officer from the Revenue has also distinguished the Single Bench judgment in the matter of Madura Coats (supra). He argues that the decision relates to a circular issued by the CBEC under the Central Excise Act, 1944, now repealed. The court holds that the circular is illegal and ultra vires. In any case, a circular issued under the repealed Act does not apply to a provision under the GST Act. The above judgment is, therefore, of little relevance in the present context. 3.4 The concerned officer from the Revenue also points out that the test report does not describe the sample as a 'fusible' article. The judgment referred to above is concerned with a 'fusible' interlining, and, therefore, not applicable in the present context. 3.5 In the opinion of the concerned officer, the Applicant's product is classifiable under Heading 5911. The product is used for providing hardness to the collars, cuffs etc. It is, according to the concerned officer, a technical purpose. Heading 591 1 includes textile products and articles for technical use, specified in Chapter Note 7 to Chapter 59. Chapter Note 7(a)(i) to Chapter 59 includes textile fabrics coated with rubber, leather or other material,....
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....nce was then pressed to a printing roll having fine dots engraved on it. High-density polyethylene powder was taken in a hopper that sat on the engraved printing roll, filling the dots. As a result, the preheated fabric got printed with plastic dots. The powder in between the engraved dots was scrapped by a doctor blade provided in the hopper. The dot printed cloth then passed through a heated chamber where the plastic melted and fused with the piece of cloth. CBEC concluded that the fusible interlining merited classification under Heading 5903 if the above printing process covered one side of the fabric with a continuous and adherent film or layer of plastic that made the fabric impervious. 4.3 In Circular No. 5/89 dated 15/06/1989, CBEC discussed the significance of the insertion of Chapter Note 2(c) in Chapter 59 by the Finance Act, 1989. After the insertion of the said Note 2(c) the fusible interlining cloth made by discrete coating with plastic by dot printing process became classifiable under Heading 5903. Before that, CBEC clarified, such cloth had been covered under Chapters 52 to 55, depending upon the textile materials used. 4.4 Chapter Note 2(c) to Chapter 59 was omitt....
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....ch refrains from expressing any view on the legality of the said circular so that the assessing officer can apply his judgment without any bias. The court, however, sets aside the impugned circular that the assessing officer has quoted in a show-cause notice in violation of the provisions of section 37B of the Central Excise Act, 1944. Such setting aside of the impugned circular restores the show cause notice, which has otherwise been vitiated by reference to the aforesaid circular. The Division Bench categorically states that it is not done on the ground that the circular is ultra vires. 4.8 It, therefore, appears that reference to the Single Bench judgment in the case of Madura Coats (supra) does not help in deciding the classification of the Applicant's product. The fact that CBEC appealed against the Single Bench judgment in 2005 also indicates that its view in this matter has also evolved from the time it issued Circular No. 5/89 dated 15/06/1989. It continues defending Circular No. 433/66/98-CX-6 dated 27/11/1998 at the court and has not made any further course correction. Circular No. 433/66/98-CX-6 dated 27/11/1998, therefore, reflects CBEC's view on the classification of ....