TaxTMI 
TaxTMI 
2021 (1) TMI 541
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....305 being product manufactured through non-woven fabrics classified under Heading No.5603. 3. The applicant further submitted that prior to introduction of the GST Act, the classification of Polypropylene Non-Woven bags was in question before the authority under Section 94 of the Kerala Value Added Tax Act, 2003 in case of M/s Malabar Treads, Manjeri. The authority after considering the Heading No. 5603 as appearing in the Schedule to the Central Excise Tariff concluded that the said product would appropriately be classifiable under HSN Code 6305.33.00 of the Customs Tariff Act which correspondence to entry no. 174 (7) (1) of List A of the third Schedule to the KVAT Act, 2003. (Copy of Order No. C3/17556/09/CT dated 29-09-2009 is annexed as Annexure-A). 4. The Applicant further submitted that after introduction of the GST Act, 2017 also the issue of classification was under consideration by various manufacturers and representations were being made. The applicant had approached the DKTE CENTER OF EXCELLENCE IN NON WOVENS (Govt. Department) and the Director of the said Organization has clarified that the Polypropylene Non-Woven fabrics are classifiable under Heading No. 5603 an....
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....ues on which the advance ruling is sought: 8. The Applicant submitted that the Polypropylene Non-Woven Bags are being manufactured out of Non-Woven fabrics which are admittedly classifiable under Heading No. 5603 i.e. as Textile Article and therefore the product manufactured out of the said material will have to be considered as Textile Article and classifiable under Heading no. 63.05. 9. The Applicant further submitted that in view of Rules of interpretation Heading No. 6305.3300 being specific heading would prevail over the general Heading of 3923. 10. The Applicant further submitted hat the Honorable Advance Ruling Authority as referred herein above as also the Honorable Appellate Advance Ruling Authority have settled the law and have confirmed the classification of Polypropylene Non-Woven Bags under Heading No. 6305.3300 and, therefore, the same would be binding. The decision of Honorable Appellate Authority for Advance Ruling is of 13-05-2019, i.e. after the clarification issued by TRU Section of Ministry of Finance, and therefore the same would prevail over the clarification. 11. The Applicant further submitted that the Director of DKTE Center of Excellence in Non....
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..... 3923? Question-2: Whether the product Non-Woven Bags would be eligible for exemption under Notification No.1/2017-C.T. (Rate) and 01/2017-I.T. (Rate) dated 28.06.2017, as amended? 17. Ongoing through the submission given by the applicant, we observe that the applicant is engaged in manufacturing of Polypropylene Non-Woven Bags through the intermediate product, i.e. Non-Woven Fabrics manufactured from Fiber grade poly propylene granules by adopting the Spun Bond technology. In this technology, poly propylene granules are fed to the hopper and passed through extruder at certain temperature. The melted material after filtering passed through the spinning unit to obtain a continuous single filament. The said filaments are then subject to lying on the continuous web and under control pressure thermal bonding. The resultant product is Non-Woven fabric, which is called Polypropylene Non-Woven fabrics. The issue for decision before us is the appropriate Rate of Tax and HSN code for Nonwoven Bags manufactured by the applicant. 18. In order to determine the tax liability on said goods, we are required to refer to the Notification No.01/2017-Central Tax (Rate) dated 28.06.....
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....or transport, storage or sale. These articles, which wary in size and shape, include in particular flexible intermediate bulk containers, coal grain, flour, potato, coffee or similar sacks, mail bags, and small bags of kind used for sending samples of merchandise by post. The heading also includes such articles as tea sachets. Packing cloths which after use as bale wrapping are roughly or loosely stitched together at the edges, but which do not constitute finished or unfinished sacks or bags, are excluded (heading 63.07)." 20. We find the competing heading for the product is CTH 3923. For ease of reference, the relevant chapter notes, the tariff entry and the HSN Explanatory note is given below : CHAPTER 39 Plastics and articles thereof NOTES: 1. Throughout this Schedule, the expression "plastics" means those materials of headings 3901 to 3914 which are or have been capable, either at the moment of polymerisation or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by moulding, casting, extruding, rolling or other process into shapes which are retain....
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....ers, lids, caps and other closures. The heading excludes, inter alia, household articles such as dustbins, and cups which are used as tableware or toilet articles and do not have the character of containers for the packing or conveyance of goods. whether or not sometimes used for such purposes (heading 39.24), containers of heading 42.02 find flexible intermediate bulk containers of heading 63.05." 21. We find that the issue of classification of PP/HDPE Bags or sacks, made of HDPE tapes and fabrics, has been dealt with at length by the Hon'ble High Court of Madhya Pradesh in case of M/s. Raj Packwell Ltd. v. UOI [1990 (50) E.L.T. 201 (M.P.)] = 1989 (9) TMI 120 - MADHYA PRADESH HIGH COURT. While deciding the identical issue, the Hon'ble High Court has observed: "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, nylon and the like." "Textiles" has been defined in Section 2(g) as under:- "Textiles" means any fabric or cloth, or yarn or garment or any other articles made wholly or in part of - (i) Cott....
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.... In the result, we hold that HDPE strips or tapes fall under the Heading 3920, Sub-heading 3920.32 of the Central Excise Tariff Act and not under heading 5406, sub-heading 5406.90. Similarly HDPE Sacks fall into Heading 3923, Sub-heading 3923.90...." 21.1 In the above decision, Hon'ble High Court of Madhya Pradesh has discuss what is textile according to the Section 2(g) of Textiles Committee Act, 1963 (Act 41 of 63) and 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, 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'. Therefore, it can be concluded that intermediate Fabrics manufactured from Fibre grade poly propylene granules cannot be considered as "textile" material. Under CTH No. 63 of Custom Tariff Act, 1975 only covers textile sacks and bags of a kind normally used for the packing of goods whereas applicant goods, Non-Woven Bags is not manufactured from textile material as discussed above. Hence, applicant's claim that their p....
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.... the statute is dealing would attribute to it". There we are in complete agreement with the Judges who held in favour of the Revenue and against the assessee. But the question is : What result does the application of this test yield? Are 'dryer felts' not 'textiles' within the ordinary accepted meaning of that word? The word 'textiles' is derived from the Latin 'texere' which means 'to weave' and it means any woven fabric. When yarn, whether cotton, silk, woollen, rayon, nylon or of any other description or made out of any other material is woven into a fabric, what comes into being is a 'textile' and it is known as such. It may be cotton textile, silk textile, woollen textile, rayon textile, nylon textile or any other kind of textile. The method of weaving adopted may be the warp and woof pattern as is generally the case in most of the textiles, or it may be any other process or technique. There is such phenomenal advance in science and technology, so wondrous is the variety of fabrics manufactured from materials hitherto unknown or un-thought of and so many are the new techniques invented for making fabric out of yarn that it would be most unwise to confine the weaving process to....
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....ifiable under HS code 3923 and attracts GST @ 18%, the relevant portion is extracted as below: "Applicability of GST on supply of Polypropylene Woven and Non-Woven Bags and PP Woven and Non-Woven Bags laminated with BOPP : 7.1 Representations have been received seeking the classification and GST rates on Polypropylene Woven and Non-Woven Bags and Polypropylene Woven and Non-Woven Bags laminated with BOPP. 7.2 As per the explanatory notes to the HSN to HS code 39.23, the heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products and includes boxes, crates, cases, sacks and bags. 7.3 Further as per the Chapter note to Chapter 39, the expression "plastics" means those materials of headings 39.01 to 39.14 which are or have been capable, either at the moment of polymerization or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticizer) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence. 7.4 Thus it is clarified that Polypropylene Woven ....