TaxTMI 
TaxTMI 
2021 (1) TMI 695
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....sessments in this regard. 2. The applicant has submitted that the company is currently engaged in manufacturing of below mentioned products for which they are proposing HSN code as mentioned against the respective products: Sr.No. Name of the product Proposed HSN code Proposed rate of tax 01. HDPE Tarpaulin/PE laminated fabric 59039090 12 02. PP Ropes 56074900 12 03. Pondliner 54072090 5 04. Vermibed 54072090 5 05. Weed mat 54072090 5 06. Wagon cover 59039090 12 07. Fumigation cover 59039090 12 08. Azolla Bed 54072090 5 09. Grow bags 54072090 5 10. Agro shade net 54072090 5 11. HDPE woven laminated fabrics 59039090 12 12. PP/HDPE woven fabric 59039090 12 3. The applicant has submitted the details of the raw materials involved and the process involved in the manufacturing of goods, as under: (a) Raw materials consumed: One or more of the following raw materials or combination thereof in different proportion is used depending upon the nature and use of the products such as HDPE/PP Granules, LLDPE and LDPE. ....
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.... cover Industrial/Agriculture 08. Azolla Bed Agriculture 09. Grow bags Agriculture 10. Agro shade net Agriculture 11. HDPE woven laminated fabrics Agriculture 12. PP/HDPE woven fabric Industrial/Agriculture 6. The applicant has stated that they are of the opinion that based on process and raw material consumed for the production of goods in which their company is engaged, their products should be charged at the rate proposed as at para-2; that as few of their products are used for farming, agriculture and support activity for the farming, lower rate of GST will ultimately help farmers as they are ultimately bearing the GST being the ultimate user of the goods; that they are enclosing bills for the products of PP woven fabrics and HDPE woven fabrics laminated of another company cum competitor namely Agriplast Tech India pvt.ltd. who have been charging GST at the same rate as they have proposed for their company under this application of advance ruling and that for the said company, order determining classification of goods under said HSN code has already been issued by the Advance Ruling authority. The applicant has also stated that....
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....he HDPE tapes wound into spools, are passed through power looms for weaving HDPE woven fabric, conforming to IS:6899:1997; that it is laminated/covered on both sides with Plastics (low-density polyethene (LDPE)), hemmed and stitched and fixed with eyelets to make the final product, namely tarpaulin made from HDPE woven fabric, conforming to IS:7903:2017; that with the supporting evidence under Chapter 59 of the GST, they propose to re-classify their product from Chapter 39 to 59 and have submitted the following points for reclassification under the Act: Chapter 59 (Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use). Heading 5903 applies to: (a)Textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square metre and whatever the nature of the plastic material(compact or cellular), other than: 1. Fabrics in which the impregnation, coating or covering cannot be seen with the naked eye(usually Chapters 50 to 55, Chapter 58 or 60); for the purpose of this provision, no account should be taken of any resulting change of colour; 2. Products in which the textile....
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.... is as mentioned against the respective products: Sr.No. Name of the product Proposed HSN code Proposed rate of tax 01. HDPE Tarpaulin/PE laminated fabric 59039090 12 02. PP Ropes 56074900 12 03. Pondliner 54072090 5 04. Vermibed 54072090 5 05. Weed mat 54072090 5 06. Wagon cover 59039090 12 07. Fumigation cover 59039090 12 08. Azolla Bed 54072090 5 09. Grow bags 54072090 5 10. Agro shade net 54072090 5 11. HDPE woven laminated fabrics 59039090 12 12. PP/HDPE woven fabric 59039090 12 Please determine the proper classification and rate of GST of above products." DISCUSSION & FINDINGS: 9. We have considered the submissions made by the applicant in their application for advance ruling as well as the arguments/discussions made by their representative Shri Dhaval Patel, C.S. at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 10. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 a....
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....s). Relevant portion of the Heading 5407 reads as under: 5407 WOVEN FABRICS OF SYNTHETIC FILAMENT YARN, INCLUDING WOVEN FABRICS OBTAINED FROM MATERIALS OF HEADING 5404 5407 10 - Woven fabrics obtained from high tenacity yarn of nylon or other polyamides or of polyesters : --- Unbleached : 5407 10 11 ---- Parachute fabrics 5407 10 12 ---- Tent fabrics 5407 10 13 ---- Nylon furnishing fabrics 5407 10 14 ---- Umbrella cloth panel fabrics 5407 10 15 ---- Other nylon and polyamide fabrics (filament) 5407 10 16 ---- Polyester suitings 5407 10 19 ---- Other polyester fabrics --- Bleached : 5407 10 21 ---- Parachute fabrics 5407 10 22 ---- Tent fabrics 5407 10 23 ---- Nylon furnishing fabrics 5407 10 24 ---- Umbrella cloth panel fabrics 5407 10 25 ---- Other nylon and polyamide fabrics of filament yarn 5407 10 26 ---- Polyester suitings 5407 10 29 ---- Other --- Dyed : 5407 10 31 ---- Parachute fabric 5407 10 32 ---- Tent fabrics 5407 10 33 ---- Nylon furnishing fabrics 5407 10 34 ---- ....
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....roduct PP ropes under the sub-heading 56074900. Heading 5607 falls under Chapter 56 (Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof). Relevant portion of the Heading 5607 reads as under: 5607 TWINE, CORDAGE, ROPES AND CABLES, WHETHER OR NOT PLAITED OR BRAIDED AND WHETHER OR NOT IMPREGNATED, COATED, COVERED OR SHEATHED WITH RUBBER OR PLASTICS - Of sisal or other textile fibres of the genus Agave : 5607 21 00 -- Binder or baler twine 5607 29 00 -- Other - Of polyethylene or polypropylene: 5607 41 00 -- Binder or baler 5607 49 00 -- Other 5607 50 - Of other synthetic fibres : 5607 50 10 --- Nylon fish net twine 5607 50 20 --- Nylon tyre cord 5607 50 30 --- Viscose tyre cord 5607 50 40 --- Nylon rope 5607 50 90 --- Other 5607 90 - Other : 5607 90 10 --- Coir, cordage and ropes, other than of cotton 5607 90 20 --- Cordage, cable, ropes and twine, of cotton 5607 90 90 --- Other 11.4 Chapter Notes of Chapter 56 read as under: 1. This Chapter does not cover: (a) waddin....
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....t has proposed to classify the products namely HDPE Tarpaulin, PE laminated fabric, wagon cover, fumigation cover, HDPE woven laminated fabrics and PP/HDPE woven fabric under sub-heading 59039090. Heading 5903 falls under Chapter 59 (Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use). Relevant portion of the Heading 5903 reads as under: 5903 TEXTILE FABRICS, IMPREGNATED, COATED, COVERED OR LAMINATED WITH PLASTICS, OTHER THAN THOSE OF HEADING 5902 5903 10 - With polyvinyl chloride : 5903 10 10 --- Imitation leather fabrics of cotton 5903 10 90 --- Other 5903 20 - With polyurethane : 5903 20 10 --- Imitation leather fabrics, of cotton 5903 20 90 --- Other 5903 90 - Other: 5903 90 10 --- Of cotton 5903 90 20 --- Polyethylene laminated jute fabrics 5903 90 90 --- Other 11.6 Chapter notes of Chapter 59 read as under: 1. Except where the context otherwise requires, for the purposes of this Chapter, the expression "textile fabrics" applies only to the woven fabrics of Chapters 50 to 55 and headings 5803 and 5806, the....
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....,500 g/m2 and containing more than 50% by weight of textile material; (b) fabrics made from yarn, strip or the like, impregnated, coated, covered or sheathed with rubber, of heading 5604; and (c) fabrics composed of parallel textile yarns agglomerated with rubber, irrespective of their weight per square metre. This heading does not, however, apply to plates, sheets or strip of cellular rubber combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (Chapter 40), or textile products of heading 5811. 5. Heading 5907 does not apply to: (a) fabrics in which impregnation, coating or covering cannot be seen with the naked eye (usually Chapters 50 to 55, 58 or 60); for the purpose of this provision, no account should be taken of any resulting change of colour; (b) fabrics painted with designs (other than painted canvas being theatrical scenery, studio backcloths or the like); (c) fabrics partially covered with flock, dust, powdered cork or the like and bearing designs resulting from these treatments; however, imitation pile fabrics remain classified in this heading; (d....
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....g discs and other machinery parts]. 12. As per the submission of the applicant, they are manufacturing and supplying HDPE woven fabrics falling under Chapter 39(Plastics and articles thereof) and Tariff items 3926 (other articles of plastics and articles of other materials of heading 3901 to 3914) and sub tariff item 39269099; that the manufacturing process involves manufacturing of HDPE tapes, which are weaved into a piece of fabric and the HDPE granules are mixed with additives and passed through an HDPE tape line plant to obtain HDPE tapes(mono-axially oriented HDPE tapes); that the HDPE tapes wound into spools, are passed through power looms for weaving HDPE woven fabric. The applicant has also submitted the step-wise process of manufacture as under: (i) Raw material storage: The applicant is procuring the raw materials used in production like HDPE Granules, LDPE Granules, color masterbatch titanium dioxide, U.V. Stabilizer, Aluminium eyelet from supplier. (ii) Tape: First process of manufacturing is to prepare tape out from HDPE granules. (iii) Fabric: Second process of manufacturing is to prepare fabric by weaving tape. (iv) Lamination: ....
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....t 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.)]. The petitioners in this petition are manufacturing HDPE woven sacks and for that purpose they have installed HOPE tape plants for manufacture of oriented tape (plastic tape). The petitioners made representations to the Assistant Collector, Central Excise, Indore Division, to the effect that the HDPE woven sacks are articles of plastic and are thus classifiable under Chapter 39 of the Central Excise Tariff Act, 1985. The contention of the petitioners was not accepted by the Assistant Collector, Central Excise, Division Indore and he passed an order dated 11-1-1988 wherein it was held that the HDPE strips of an apparent width of 5 mm are classifiable under sub-head No.5406.11, of Polypropylene under Chapter sub-head 5406.90 and fabrics thereof under Chapter heading 5408.00. Relevant portions of the said judgement of the Hon'ble High Court are reproduced hereunder: "16. Similarly the CEGAT Special Bench in the case of Shree Radhe Industries, Kalol v. Collector of Customs and Central Excise, Ahmedabad (1983 ELT 379) has held that since the HDPE t....
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.... 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 (supra) and the Shellya Industries case (supra) 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 man-made, 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 if 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 f....
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....tioner, the definition of 'textile' and 'fibre' as discussed above, the process of the manufacture of the HDPE tapes, the earlier judgments of the CEGAT approved by the Supreme Court and accepted by the Department, all clearly go to show that the HDPE bags are the bags woven by the 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 the aforesaid HDPE woven sacks has to be classified as an Item under entry 39.20 of Chapter 39 and not under entry 54.06 of Chapter 54. Accordingly the entries of the finished goods have also to be made under the proper Chapter of the Tariff Act treating them as the finished goods made of plastic strips. 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...." 12.2 In the above decision Hon'ble High Court of Madhya Pradesh has discussed what is textile according to Section 2(g) of Textiles Commi....
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....: High density polyethylene (HDPE) tarpaulin is a product with multiple end uses. HDPE fabric is laminated with LDPE, LLDPE or a blend of the two. Tarpaulins are used in many ways to protect persons and things from wind, rain, and sunlight. They are used during construction or after disasters to protect partially built or damaged structures, to prevent mess during painting and similar activities, and to contain and collect debris. (2) PE laminated fabric: It is a woven polyester fabric laminated to transparent PE Membrane. This composite is 100% waterproof and can withstand 10,000 mm H20 head under static & dynamic conditions (which signifies the composite is absolutely water proof) It has it's utility for soft-luggage industry and also for shoe-industry. (3) PP ropes: Most commonly used synthetic fiber ropes. Polypropylene Ropes are made from high quality polypropylene (PP) and are a perfect choice for numerous applications. Polypropylene rope is incredibly strong and durable. It is rot-proof and resistant to moisture. It can also be easily tied into knots and it does not react with any chemicals or solvents. (4) A pond liner is an impermeable geomem....
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....available in laminated and unlaminated form. These fabrics are used in different industrial segments like Bag manufacture, Fertilizers, Cement, Polymers, Chemicals, Textiles, Machinery and Food grain packing. 13.1 We have gone through the entire Chapter 39 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) including the chapter notes as well as the above details and find that none of the aforementioned products (except 'grow bags' appearing at Sr.No.9 above) is covered under the Headings 3901 to 3925 of Chapter 39 as there is no specific mention of any of these products under any of the aforementioned headings. Since heading 3926 reads as 'Other articles of plastics and articles of other materials of headings 3901 to 3914', it implies that articles of plastics or articles of other materials not covered in any of the headings from 3901 to 3925 would be covered under heading 3926 which is a residuary entry. As per the explanatory notes to HSN with regard to heading 3926, the heading 3926 covers articles, not elsewhere specified or included, of plastics or of other materials of headings 39.01 to 39.14. We, therefore, reach the conclusion that the products namely HDPE....
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....cute;--- Aprons : 3926 20 21 ---- Of polyurethane foam 3926 20 29 ---- Other --- Plastic stickers for garments : 3926 20 31 ---- Of polyurethane foam 3926 20 39 ---- Other --- Collar stays, patties, butterfly, shoulder-padsand other stays : 3926 20 41 ---- Of polyurethane foam 3926 20 49 ---- --- Other : 3926 20 91 ---- Of polyurethane foam 3926 20 99 ---- Other 3926 30 - Fittings for furniture, coach work or the like : 3926 30 10--- Of polyurethane foam 3926 30 90 --- Other 3926 40 - Statuettes and other ornamental articles : --- Bangles : 3926 40 11 ---- Of polyurethane foam 3926 40 19 ---- Other --- Beads : 3926 40 21 ---- Of polyurethane foam 3926 40 29 ---- Other kg. 10% - --- Statuettes : 3926 40 31 ---- Of polyurethane foam 3926 40 39 ---- Other --- Table and other household articles (including hotel and restaurant) for decoration : 3926 40 41 ---- Of polyurethane foam 3926 40 49 ---- Other --- Decorative sheets : 3926....
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....ts (heading 3001); (e) solutions (other than collodions) consisting of any of the products specified in headings 3901to 3913 in volatile organic solvents when the weight of the solvent exceeds 50% of the weight of the solution (heading 3208); stamping foils of heading 3212; (f) organic surface-active agents or preparation of heading 3402; (g) run gums or ester gums (heading 3806); (h) prepared additives for mineral oils (including gasoline) or for other liquids used for the same purposes as mineral oils (heading 3811); (ij) prepared hydraulic fluids based on polyglycols, silicones or other polymers of Chapter 39 (heading 3819); (k) diagnostic or laboratory reagents on a backing of plastics (heading 3822); (l) synthetic rubber, as defined for the purpose of Chapter 40, or articles thereof; (m) saddlery or harness (heading 4201) or trunks, suit-cases, hand-bags or other containers of heading 4202; (n) plaits, wickerwork or other articles of Chapter 46; (o) wall coverings of heading 4814; (p) goods of Section XI (textiles and textile articles); (q) articles of Section XII (for e....
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....ng which occurs last in numerical order among those which equally merit consideration. 5. Chemically modified polymers, that is those in which only appendages to the main polymer chain have been changed by chemical reaction, are to be classified in the heading appropriate to the unmodified polymer. This provision does not apply to graft copolymers. 6. In headings 3901 to 3914, the expression "primary forms" applies only to the following forms: (a) liquids and pastes, including dispersions (emulsions and suspensions) and solutions; (b) blocks of irregular shape, lumps, powders (including moulding powders), granules, flakes and similar bulk forms. 7. Heading 3915 does not apply to waste, parings and scrap of a single thermoplastic material, transformed into primary forms (headings 3901 to 3914). 8. For the purposes of heading 3917, the expression "tubes, pipes and hoses" means hollow products, whether semi-manufactures or finished products, of a kind generally used for conveying, conducting or distributing gases or liquids (for example, ribbed garden hose, perforated tubes). This expression also includes sausage casings and other ....
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....d according to the following provisions: (a) where there is a sub-heading named "Other" in the same series: (1) the designation in a sub-heading of a polymer by the prefix "poly" (for example polyethylene and polyamide -6,6) means that the constituent monomer unit or monomer units of the named polymer taken together must contribute 95% or more by weight of the total polymer content; (2) the copolymers named in sub-headings 3901 30, 3903 20, 3903 30 and 3904 30 are to be classified in those sub-headings, provided that the comonomer units of the named copolymers contribute 95% or more by weight of the total polymer content; (3) chemically modified polymer are to be classified in the sub-heading named "Other", provided that the chemically modified polymers are not more specifically covered by an other sub-heading; (4) polymers not meeting (1), (2) or (3) above, are to be classified in the sub-heading, among the remaining sub-headings in the series, covering polymers of that monomer unit which predominates by weight over every other single comonomer unit. For this purpose, constituent monomer units of polymers falling in the same sub-heading....
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....te) dated 28.06.2017 which contains the headings, sub-headings as well as the rates of Central Tax GST applicable to various goods which are covered under 6 schedules as under: (i) 2.5 per cent. in respect of 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 On going through the aforementioned notification, we find that Sub-headings 3923 and 3926 appear at Entry Nos.108 and 111 respectively in Schedule-III of the said notification (wherein GST rate is 18% (9% SGST + 9% CGST)) and Plastic tarpaulin appears at Entry No.111. The same reads as under: Sr.No. Chapter / Heading / Sub-heading / Tariff item Description of goods 108. 3923 Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics. 111. 3926 PVC Belt Conveyor, Plastic Tarpaulin. It is ....