AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 907
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....r advance ruling in the application for Advance Ruling filed by it. "1. Whether the product Non-woven Bags manufactured through the intermediate product, Non-Woven Fabrics classifiable under Heading No. 5603 are properly classifiable under Heading No.6305 or under Heading 3923? 2. Whether the product Non-woven Bags would be eligible for exemption under Notification No.01/2017-CT(Rate) and 01/2017-1T(Rate) dated 28.06.2017, as amended?" 4. The appellant has submitted that they are engaged in the manufacturing of Non-Woven Bags through the intermediate product i.e. Non-Woven fabrics manufactured from Fiber Grade poly propylene granules by adopting Spun Bond technology, in which poly propylene granules are fed to the hopper and passed through extruder at certain temperature and the melted material after filtering passed through the spinning unit to obtain a continuous single filament which are subjected to lying on the continuous web and under control pressure thermal bonding resulting in product namely Non-Woven fabric which is used called Polypropylene Nonwoven fabric. 5. The appellant has submitted that in view of general rules of interpretation, their product is classifiable....
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.... granules by adopting the Spun Bond technology, merits classification under HS code 3923. The rate of GST applicable on said products during different periods are as below: Sr.No. Period Rate of CGST Rate of SGST Total rate of GST 1. 01.07.2017 to 30.09.2019 9% 9% 18% 2. 01.10.2019 to 30.12.2019 6% 6% 12% 3. 01.01.2020 to till date 9% 9% 18% Ques. 2. Whether the product Non-woven Bags would be eligible for exemption under Notification No.01/2017-CT(Rate) and 01/2017-IT(Rate) dated 28.06.2017, as amended? Ans: Answered in negative..." 7. Aggrieved by the aforesaid advance ruling, the appellant has filed the present appeal. 7.1 The appellant in the ground of appeal has submitted that the GAAR erred in holding that polypropylene non-woven and non-laminated bags are classifiable under Chapter Heading 3923 and in not considering their submission, in view of Rules of Interpretation, Chapter Heading 6305.3300 being specific heading would prevail over the general Chapter Heading 3923. 7.2 The appellant submitted that the GAAR erred in stating that the decisions of Advance Ruling Authority and Appellate Advance Ruling Authority are binding on applicant under Sec....
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....n most of the textiles, or it may be another process. Due to advance in technology, variety of fabrics are manufactured from various unknown materials using new techniques invented for making fabric out of yarn so, it would be unwise to confine the weaving process to the warp and woof pattern; weaving of yarn would mean binding or putting together by some process to form a fabric. 8.1 The appellant vide their additional submission submitted that GAAR erred while dealing with decision Appellate Authority for Advance Ruling in case of M/s U.S. Polytech observing that said ruling is not applicable in view of Section 103 of CGST Act. It is settled law that any decision of Higher Appellate Authority is binding on lower authority and therefore, finding of GAAR is misapprehension of law as Section 103 of CGST Act does not speak that the order of Appellate Advance Ruling Authority would not be binding on the Advance Ruling Authority. 8.2 The appellant further submitted the Audit objection, raised in case of M/s Girivarya Non-Woven Fabrics Pvt. Ltd. (firm engaged in similar business), dated 26.11.2020 and reply thereof, on account of pre-consultation to SCN, given by Commissioner dated 06....
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.... Then, these filaments are laid on continuous web under control pressure thermal bonding resulting in non-woven fabric and the said intermediate product -poly propylene non-woven fabrics" is classifiable under Chapter Heading 5603 and subsequently Poly Propylene Non-woven Bags is classifiable under Chapter Heading 6305 of Customs Tariff Act, 1975. 13. We find that the classification of goods under GST regime has to be done in accordance with the Customs Tariff Act, 1975, which in turn is based on Harmonized System of Nomenclature, popularly known as 'HSN". The rules of interpretation, section notes and chapter notes as specified under the Customs Tariff Act, 1975 are also applicable for classification of Goods under GST regime. However, once an item is classified in accordance with the Customs Tariff Act. 1975, the rate of tax applicable would be arrived at on the basis of notifications issued under GST by respective Governments. 14. The appellant claimed that Poly Propylene Non-Woven bag is classifiable under Chapter Heading 6305 of Customs Tariff Act, 1975 which is elaborated below: CHAPTER 63 6305- Sacks and bags, of a kind used for the packing of goods: 6305.10- O....
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....s, 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 audio cassettes without magnetic tape. (c) Stoppers, 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....
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....tion under 11S code 3923 as mentioned in circular. In the above said circular, it is further stated at Para 7.5 that Non-laminated woven bags (made from materials other than polypropylene) would be classified as per their constituting materials. What is manufactured by the appellant is non-woven bags and hence Para 7.4 is relevant. In view of above we find that TRU Circular dated 31.12.2018 is squarely applicable on the product of appellant viz. Poly Propylene Non-Woven bag and the same is classifiable under HSN Code 3923. 17. As regard to appellant's submission that GAAR erred in holding that decisions of Advance Ruling Authority and Appellate Advance Ruling Authority is not binding on applicant under Section 103 of CGST Act without considering the fact that the Advance Ruling Authority and Appellate Advance Ruling Authority, as referred in their submission, have settled the law and confirmed the classification of polypropylene non-woven bags under Chapter Heading 6305.3300 and same were of binding/persuasive in nature, we find that it is clearly mentioned in Section 103 of CGST Act, 2017 that Advance Ruling is applicable on the applicant who sought it as well as on the conc....
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....on of HDPE (High Density Poly-Ethylene, a kind of plastic) Bags or sacks is discussed at length in finding of Madhya Pradesh High Court in said judgement. Relevant portion of the same is reproduced below: "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 S. 2(a) as under : "fibre" means man-made fibre including regenerated cellulose rayon, nylon and the like." "Textiles" has been defined in S .2(g) as under: "textiles" means any fabric or cloth or yarn or garment or any other article 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 'textiles' plastic has been mentioned as a commodity to be included in the definition o....
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.... 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 bags woven by the plastic strips and they, therefore, are goods of pl....
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....ric made from polypropylene, by no stretch of imagination construed as textile but merits classification as plastic or article of plastic under Chapter Heading No. 3923. 20. The appellant submitted that the GAAR failed in considering the fact that while referring to the decision in case of Porritts and Spencers (Asia) Limited V/s State of Haryana [1983 (13) ELT 1607 (S.C.)] it is not the intention but the finding is to be looked into. The Supreme Court in above case settled the law that textile means when yarn, whether cotton, silk, woolen, rayon, nylon or made out of any other material. To understand the findings of Supreme Court in above case, relevant portion is reproduced as under: "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 and against the assessee. But the question is : What result does the application of this test yield? Are `dryer felts' not `textiles'....