TaxTMI 
TaxTMI 
2021 (3) TMI 548
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....e agricultural sector for water preservation. 2. The applicant has submitted that they, as a manufacturer of Geo Membrane for Water Proof Lining fabrics have sought classification of the same under HSN 59039090 and have submitted the brief manufacturing process for the said product as under: (a) Tape/Strip Extrusion: Tapes/Strips are manufactured from raffia grade HDPE granules which shall be UV stabilized by incorporating suitable carbon black, UV and Additives. Granules are then extruded through sheet die to produce solid sheet which is further uniformly slitted into number of tapes. These tapes are then passed through hot air oven for twist stretching with proper orientation to the tapes to achieve the required tape width and desired strength. Width of the tape/strip is between(4.1 mm to 4.3 mm) and the Linear Density of the tape/strip is 1500 to 2400 Denier. Tapes/strips are wound on bobbins for further processing. (b) Fabric weaving: HDPE woven fabrics are manufactured on Circular or Flat looms. As per design of woven fabric, Warp and Weft tapes are loaded accordingly. These tapes are then passed through Machine Direction and Cross Direction accordingly to....
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....h coating or covering can be seen with the naked eye with no account being taken of any resulting change of colour (Chapter 39); (4) fabrics partially coated or partially covered with plastics and bearing designs resulting from these treatments (usually Chapters 50 to 55, 58 or 60); (5) plates, sheets or strip of cellular plastics, combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (Chapter 39); or (6) textile products of heading 5811; (b) fabrics made from yarn, strip or the like, impregnated, coated, covered or sheathed with plastics, of heading 5604. 4. The applicant has submitted that the Chapter Note 7 of Chapter 59 reads as under: Heading 5911 applies to the following foods, which do not fall in any other heading of Section XI: (a) textile products in the piece, cut to length or simply cut to rectangular (including square) shape (other than those having the character of the products of headings 5908 to 5910), the following only: (i) textile fabrics, felt and felt-lined woven fabrics, coated, covered or laminated with rubber, leather or other material, of a kind use....
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....ing can be seen with the naked eye with no account being taken of any resulting change of colour (Chapter 39); (4) fabrics partially coated or partially covered with plastics and bearing designs resulting from these treatments (usually Chapters 50 to 55, 58 or 60); (5) plates, sheets or strip of cellular plastics, combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (Chapter 39); or (6) textile products of heading 5811;" 6.3 On perusal of the Note 2 to Chapter Heading 5903, we find that the said heading covers textile fabrics, impregnated, coated, covered or laminated with plastics. Such products are classified here whatever the weight per square meter and whatever the nature of the plastic component (compact or cellular) provided that in the case of impregnation, coating or covered fabrics, impregnation, coating or covering can be seen with the naked eye. The textile fabrics in which impregnation, coating or covering cannot be seen with the naked eye usually fall in 50 to 55, 58 or 60. 6.4 In the present case, we find that the applicant in their submission has admitted that this coating pattern can be se....
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....r Proof Lining Fabrics" manufactured and supplied by the applicant (also referred to as Pond Liner) which is used for Water Proof Lining of Ponds, Canals and other Water storage places, and the GST liability of the said product. In order to determine the tax liability on said goods, we will be required to refer to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 containing 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 Further, Explanation (iii) and (iv) of the said Notification reads, as under: (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as sp....
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....sed in machinery and plant 5911 31 40 --- Jute fabrics and articles used in machinery or plant 5911 31 50 --- Textile fabrics of metalised yarn of a kind commonly used in paper making or other machinery 5911 31 90 --- Other 5911 32 -- Weighing 650 g/m2 or more: 5911 32 10 --- Felt for cotton textile industries, woven 5911 32 20 --- Woven textiles felt, whether or not impregnated or coated, of a kind commonly used in other machines 5911 32 30 --- Cotton fabrics and articles used in machinery and plant 5911 32 40 --- Jute fabrics and articles used in machinery or plant 5911 32 50 --- Textile fabrics of metalised yarn of a kind commonly used in paper making or other machinery 5911 32 90 --- Other 5911 40 00 - Straining cloth of a kind used in oil presses or the like, including that of human hair 5911 90 - Other : 5911 90 10 --- Paper maker's felt, woven 5911 90 20 --- Gaskets, washers, polishing discs and other machinery parts of textile articles 5911 90 90 --- Other 11. Relevant portion of the Chapter notes of Chapter 59 with respect to Headings 59....
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....ed, impregnated or coated, of a kind used in machinery or for other technical purposes; (v) textile fabrics reinforced with metal, of a kind used for technical purposes; (vi) cords, braids and the like, whether or not coated, impregnated or reinforced with metal, of a kind used in industry as packing or lubricating materials; (b) textile articles (other than those of headings 5908 to 5910) of a kind used for technical purposes[for example, textile fabrics and felts, endless or fitted with linking devices, of a kind used in paper making or similar machines (for example, for pulp or asbestos-cement), gaskets, washers, polishing discs and other machinery parts]. 12. As per the submission of the applicant, the manufacturing process of Geo Membrane for Water Proof Lining fabrics is as under: (a) Tape/Strip Extrusion: Tapes/Strips are manufactured from raffia grade HDPE granules which shall be UV stabilized by incorporating suitable carbon black, UV and Additives. Granules are then extruded through sheet die to produce solid sheet which is further uniformly slitted into number of tapes. These tapes are then passed through hot air oven for twist stre....
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....c. These HDPE tapes are manufactured from HDPE Granules which are mixed with additives and then extruded through sheet die to produce solid sheet which is further uniformly slitted into number of tapes. We find that the HDPE granules i.e. High Density Polyethelene(HDPE) granules or High Density Polyethelene (HDPE) tapes are actually nothing but plastics and are covered under Chapter 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). Further, Chapters 50 to 63 of the said schedule covers Textile and Textile articles only. So for the products manufactured by the applicant, to be included under the sub-headings 5903 or 5911, they need to be textile material. In this context, we would like to refer a judgement of the Hon'ble High Court of Madhya Pradesh wherein a similar issue with regard to the 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.)]. 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....
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.... material or that the HDPE tapes are textile material. They have simply refused to go into the aforesaid decisions in view of the fact that under the new Tariff Act there is different classification and it has got a synthetic basis after research. 19. Now, textile material has not been defined in the Tariff Act. However, 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) Cotton; or (ii) Wool; 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....
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....at the learned Asst. Collector, C. Excise and the Collector Appeals, Central Excise have done is that they have considered only the width of the strip and have come to the conclusion that since the strip is of less than 5 mm, therefore, it falls within 54.06 ignoring the fact that in addition to this there should be something to arrive at a conclusion that the aforesaid strip is of synthetic textile material. If the strip is a strip of plastic only and not a synthetic textile material and is also known in the common parlance as a commodity of plastic, and the finished goods i.e. the HDPE woven sacks are also known in the common parlance as plastic woven sacks, then it cannot be held that the strips with which such bags are woven are the strips of synthetic textile material. 20. Thus, the view of the Textile Commissioner as discussed above, the registration by the DGTD of the factory of the petitioner, 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 bag....
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....1975(51 of 1975) covers textile and textile articles only, whereas applicant's product is not manufactured from textile material as discussed above but from HDPE tapes which are plastic material. Hence applicant's proposed claim that their product namely 'Geo Membrane for Water Proof Lining fabrics' i.e. Pondliner should get covered either under Chapter Headings No.5903 or 5911 does not hold water as their product manufactured from HDPE tapes is an article of plastic only and is therefore undoubtedly classifiable under Chapter 39 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) only. 15. We also find that the applicant has relied on the case of Advance Ruling filed by THE RUBY MILLS LTD., cited in 2020 (38) G.S.T.L. 206 (AAR-GST-UK), before the AAR, Uttarakhand to support their contention. We have gone through the aforementioned case and find that the issue involved in the said case is completely different from the issue in hand. The question involving Advance Ruling in the said case was whether the cotton fabrics manufactured by M/s. Ruby Mills ltd. which was coated or laminated with plastics would be covered under Chapter 52 or Heading 5903 of Chapter 59 of th....
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....duct of the applicant as well as their uses. We have also 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 the aforementioned product is not covered under any of 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. Further, 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 residual 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 product namely "Geo Membrane for Waterproof Lining fabrics(also referred to as Pond Liner) would invariably be covered under heading 3926 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975). Heading 3926 as appe....
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....els; welts: 3926 90 31 ---- Of polyurethane foam 3926 90 39 ---- Other kg. --- Rings, buckles, tacks, washers and other decorative fittings made of plastic used as trimmings and embellishments for leather products; patterns for leather foot wear, leather garments and leather goods : 3926 90 41 ---- Of polyurethane foam 3926 90 49 ---- Other --- Retroreflective sheeting of other than of heading 3920 : 3926 90 51 ---- Of polyurethane foam 3926 90 59 ---- Other --- Hangers : 3926 90 61 ---- Of polyurethane foam 3926 90 69 ---- Other --- Plastic or nylon tipped hammers; insulating linerof nylon, HDPE : 3926 90 71 ---- Of polyurethane foam 3926 90 79 ---- Other 3926 90 80 ---- Polypropylene articles, not elsewhere specified or included --- Other: 3926 90 91 ---- Of polyurethane foam 3926 90 99 ---- Other 18. Chapter notes to Chapter 39 read as under: 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 a....
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.... (w) articles of Chapter 92 (for example, musical instruments or parts thereof); (x) articles of Chapter 94 (for example, furniture, lamps and lighting fittings, illuminated signs, pre-fabricated buildings); (y) articles of Chapter 95 (for example, toys, games, sports requisites); or (z) articles of Chapter 96 (for example, brushes, buttons, slide fasteners, combs, mouth-pieces or stems for smoking pipes, cigarette-holders or the like, parts of vacuum flasks or the like, pens, propelling pencils). 3. Headings 3901 to 3911 apply only to goods of a kind produced by chemical synthesis, falling in the following categories: (a) liquid synthetic polyolefins of which less than 60% by volume distils at 3000C, after conversion to 1,013 millibars when a reduced pressure distillation method is used (headings 3901 and 3902); (b) resins, not highly polymerised, of the coumarone-indene type (heading 3911); (c) other synthetic polymers with an average of at least 5 monomer units; (d) silicones (heading 3910); (e) resols (heading 3909) and other prepolymers. 4. The expressions "copolymers" covers all polymers....
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....onsisting of plastics fixed permanently on a backing of any material other than paper, the layer of plastics (on the face side) being grained, embossed, coloured, design-printed or otherwise decorated. 10. In headings 3920 and 3921, the expression "plates, sheets, film foil and strip" applies only to plates, sheets, film, foil and strip (other than those of Chapter 54) and to blocks of regular geometric shape, whether or not printed or otherwise surface-worked, uncut or cut into rectangles (including squares) but not further worked (even if when so cut they become articles ready for use). 11. Heading 3925 applies only to the following articles, not being products covered by any of the earlier headings of sub-Chapter II: (a) reservoirs, tanks (including septic tanks), vats and similar containers, of a capacity exceeding 300 l; (b) structural elements used, for example, in floors, walls or partitions, ceilings or roofs; (c) gutters and fittings thereof; (d) doors, windows and their frames and thresholds for doors; (e) balconies, balustrades, fencing, gates and similar barriers ; (f) shutters, blinds (including Ve....
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..... Only the constituent comonomer units of the polymers in the series under consideration are to be compared; (2) chemically modified polymers are to be classified in the sub-heading appropriate to the unmodified polymer. Polymer blends are to be classified in the same sub-heading as polymers of the same monomer units in the same proportions. 2. For the purposes of sub-heading 3920 43, the term "plasticisers" includes secondary plasticisers. 19. On going through the above, we find that the product of the applicant namely "Geo Membrane for Waterproof Lining fabrics (also referred to as Pond Liner) is classifiable under Sub-heading No.39269099 of Chapter 39 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) since we do not find the specific mention of this product in any of the other sub-headings of Heading 3926. 20. Now, in order to find out the tax liability of the aforementioned products, we will be required to refer to Notification No.01/2017-Central Tax (Rate) 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....
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.... Schedule-IV (i) S. Nos. 2, 3, 4, 5, 6,7, 8, 9, 11, 16, 17, 19, 23, 25, 26, 27, 28, 29, 30, 31 32, 33, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45 and the entries relating thereto, shall be omitted; 20.3 In view of the above, we find that the classification of the product namely "Geo Membrane for Waterproof Lining fabrics(also referred to as Pond Liner) manufactured and supplied by the applicant was covered under Entry No.45 of Schedule-IV of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 (upto 14.11.2017) which read as "Other articles of plastics and articles of other materials of headings 3901 to 3914 [other than bangles of plastic, PVC Belt Conveyor, plastic beads and plastic tarpaulins] and during this period, the said product was liable to GST at 28% (14% SGST + 14% CGST) . However, Entry No.45 of Schedule-IV was omitted with effect from 15.11.2017 and Entry No.111 of Schedule-III of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 which read earlier as "PVC Belt Conveyor, Plastic Tarpaulin" was amended with effect from 15.11.2017 to read as "Other articles of plastics and articles of other materials of headings 3901 to 3914 [other than bangles....