TaxTMI 
TaxTMI 
2021 (1) TMI 583
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....laments are then subject to lying on continuous web and under control pressure thermal bonding. The resultant product is non Woven fabrics which is called Polypropylene Non Woven Fabric. 3. The applicant submitted that prior to introduction of Goods and Service Tax Act, the Polypropylene Non Woven Bags were being classified under heading No. 6305 being product manufactured through Non woven fabric classifiable under Heading No. 5603. 4. The applicant further submitted that prior to introduction of Goods and Service Tax 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 the 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 Custom Tariff Act which correspondence to entry No. 174 (7) (1) of List A of the third Schedule to the KVAT Act, 2003. 5. The applicant submitted that the after the introduction of GST Act, 2017 one of the manufacturer M/s. Karam Green Bags had approached DKT....
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....T (Rate) and 01/2017-I.T. (Rate) dated 28.06.2017 as amended? Applicant's interpretation of law and/or facts 10. The applicant submitted that the Polypropylene Non Woven Bags are being manufactured out of Non Woven fabrics which are admittedly classifiable under heading No. 5603i.e. as Textile Article and therefore the product manufactured out of the said material will have to considered as textile article and classifiable under Heading No. 63.05. 11. The applicant submitted that in view of Rules of interpretation Heading No. 6305.3300 being specific heading would prevail over the general Heading of 3923. 12. The applicant submitted that the Hon'ble Advance Ruling Authority as referred herein above as also the Hon'ble Appellate Advance Ruling Authority have settled the law and have confirmed the classification of Polypropylene Non Woven Bags under heading No. 6305.33.00 and therefore the same would be binding. The decision of Hon'ble 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 be prevail over the clarification. 13. The Applicant submitted that the Direct....
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.... goods viz. Non Woven Polypropylene Bag. The applicant claims that their product is classifiable under CTH 6305. The relevant chapter Note, headings, HSN Explanatory Notes are examined as under: 6305 SACKS AND BAGS, OF A KIND USED FOR THE PACKING OF GOODS 6305 10 -Of jute or of other textile bast fibres of heading 5303 : ............................................... 6305 20 00 Of cotton Of man-made textile material : 6305 32 00 --Fexible intermediate bulk containers 6305 33 00 --Other, of polyethylene or polypropylene stip or the like 6305 39 00 --Other 6305 90 00 -Of other textile materials Further, explanations to the Heading 6305 90 00, in HSN is as follows : 63.05 -Sacks and bags, of a kind used for the packing of goods (+). 6305 10 -Of jute or of other textile bast fibres of heading 5303 : 6305 20 00 -Of cotton -Of man-made textile material : 6305 32 00 --Flexible intermediate bulk containers 6305 33 00 --Other, of polyethylene or polypropylene stip or the like 6305 39 00 --Other 6305 90 00 -Of other textile materials This heading covers textile ....
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.... articles - Sacks and bags (including cones) : 3923 21 -- Of polymers of ethylene 3923 29 -- Of other plastics 3923.30 - Carboys, bottles, flasks and similar articles 3923.40 - Spools, cops, bobbins and similar supports 3923.50 - Stoppers, lids, caps and other closures 3923.90 - Other This heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products. The articles covered include : (a) Containers such as boxes, cases, crates, sacks and bags (including cones and refuse sacks), casks, cans, carboys, bottles and flasks. The heading also covers : (i) Cups without handles having the character of containers used for the packing or conveyance of certain foodstuffs, whether or not they have a secondary use as tableware or toilet articles; (ii) Bottle preforms of plastics being intermediate products having tubular shape, with one closed end and one open end threaded to secure a screw type closure, the portion below the threaded end being intended to be expanded to a desired size and shape. (b) Spools, cops, bobbins and similar supports, including video or ....
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.... at the intermediate stage articles classifiable under Item No. 15A(ii) if any tariff item emerges, the said product would be considered to have been produced out of plastic material falling under Tariff Item No. 15A(i) and, therefore, the HDPE woven sacks should be considered as articles of plastic." Having so discussed the and defined the words 'Man-made Fibre' and 'Textile' for the purpose of arriving at the appropriate classification of HDPE Woven Bags/Sacks, the Hon'ble High Court has opined; '..............the process of manufacture of HDPE tapes, the earlier judgments of the CEGAT approved by the Supreme Court and accepted by the department clearly go to show that HDPE bags are the bags woven by plastic strips and they, therefore, are goods of plastic and the material used for weaving those bags being the strips of plastic made from plastic granules, the strips of plastic used for weaving aforesaid HDPE woven sacks has to be classified as an item under Entry 3920 of Chapter 39 and not under Entry 5406 of Chapter 54. Accordingly, entries of finished goods have also to be made under proper Chapter of the Tariff Act treating them as the finished goods made of plastic s....
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....an't be relied upon in the present case of the Applicant. 25. Further, applicant relied upon the Hon'ble Supreme Court decision in the case of M/s. PORRITTS & SPENCER (ASIA) LTD Vs. State of Haryana reported in ELT 1983 (13) ELT 1607 (S.C.) stating that the Hon'ble Supreme Court has settled the law that the word "Textile" would also cover the fabric manufactured through any material. The applicant has failed to understand the intention of the Hon'ble Supreme Court and therefore relied upon the specific last line of the Paragraph of the order. Whereas, in order to understand the meaning of said Paragraph, it is necessary to read the order thoroughly and comprehensively. The Hon'ble Supreme Court, in the said Order has defined what is textile and the relevant part of the order is reproduced as under for better understanding: 6. There can, therefore, be no doubt that the word 'textiles' in Item 30 of Schedule 'B' must be interpreted according to its popular sense, meaning "that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it". There we are in complete agreement with the Judges who held in favour of the Revenue a....
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.... emerged by weaving of yarn of cotton, silk, rayon or nylon and similar type of material. The said textile may be used for making apparel, bed sheet or tapestry or upholstery or as towel. Therefore, fabric made of other than the yarn of cotton, silk, rayon or nylon and similar type of material is not a textile. The word used in the sentence is "similar type of material" and the meaning of said word can only be drawn in reference of the words used before the above word. The fabric made of Fiber grade Poly Propylene granules is not a "similar type of material" of cotton, silk, rayon or nylon. Hence fabric made of Fiber grade Poly Propylene granules cannot be considered as textile. Hence, ratio of above case law is not squarely applicable to the present case. 26. Reference is also invited to CBIC (TRU) Circular No.80/54/2018-GST issued from F. No. 354/432/2018-TRU dated 31st December, 2018, clarifying GST rates & classification in respect of various goods. Para 7 of subject Circular has clarified that the goods viz. polypropylene woven and non-woven bags are classifiable under HS code 3923 and attracts GST @ 18%, the relevant portion is extracted as below: "Applicability o....
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....goods specified in Schedule I, (ii) 6 per cent. in respect of goods specified in Schedule II, (iii) 9 per cent. in respect of goods specified in Schedule III, (iv) 14 per cent. in respect of goods specified in Schedule IV, (v) 1.5 per cent. in respect of goods specified in Schedule V, and (vi) 0.125 per cent. in respect of goods specified in Schedule VI. Further, Explanations (iii) and (iv) of the said Notification read as under: (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (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. The rates of GST leviable on above product were changed from time to time, as discussed below: (A) From 01.07.2017 to 30.09.2019: The goods of Chapter heading 3923 are covered under Sr. No. 108 of Sched....