TaxTMI 
TaxTMI 
2023 (11) TMI 666
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....se; c) Pass such further orders/writs and other reliefs as the nature and circumstances of the case may require;" 2. The first petitioner, which is an association of technical textiles manufacturers and the second petitioner which is a member of the said association, are principally aggrieved by the Circular dated 31 December 2018 issued by the Tax Research Unit [TRU] constituted under the first respondent, and to the extent that it purports to clarify that polypropylene woven and non-woven bags including those laminated with Biaxially Oriented Polypropylene [BOPP] are liable to be classified as falling under Chapter 39 and more particularly Tariff Heading 3923 forming part of the First Schedule to the Customs Tariff Act, 1975 [CTA]. The dispute essentially related to a question of classification of polypropylene woven and non-woven bags under the Harmonized System of Nomenclature [HSN]. 3. The TRU has, on due consideration of the aforesaid issue, clarified that those articles would be classifiable as 'plastic bags' under Tariff Heading 3923. The petitioners are aggrieved by the aforesaid Circular, since it contends that polypropylene woven or nonwoven bags are made ....
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....uld have been achieved only by way of a directive issued by the Board and none other. 7. We note that learned counsels for the respondents could not draw our attention to any provision of the CGST Act, in terms of which the TRU could be said to have been clothed with the authority or jurisdiction to render a clarification with respect to classification of goods and articles. That power clearly appears to stand conferred upon the Board exclusively. We are thus of the considered opinion that no authority vested in the TRU to issue the clarification impugned before us. 8. While this would have been sufficient to dispose of the writ petition on this short ground alone, we proceed further in light of the detailed submissions which were addressed by respective counsels and related to the classification of the article itself. 9. Mr. Lakshmikumaran drew our attention to the title of Chapter 39 of the First Schedule to the 1975 Act and which deals with "Plastics and Articles Thereof". Learned counsel laid emphasis on Notes 1 and 2 thereof and which purports to exclude textile materials which would otherwise fall within the ambit of Section XI of the First Schedule to the 1975 Act. ....
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....s of Section XVI (machines and mechanical or electrical appliances); (t) parts of aircraft or vehicles of Section XVII; (u) articles of Chapter 90 (for example, optical elements, spectacle frames, drawing instruments); (v) articles of Chapter 91 (for example, clock or watch cases); (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, prefabricated 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, and monopods, bipods, tripods and similar articles." 10. It would thus appear that while Tariff Heading 3923 speaks of articles for the conveyance or packing of goods, it would essentially extend to articles made of plastics and read holistically exclude textiles completely therefrom. Tariff Heading 3923 is reproduced hereinbelow:- "3923 &nbs....
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....) 5603 Nonwovens, whether or not impregnated, coated, covered or laminated - Of man-made filaments: 5603 11 -- Weighing not more than 25 g/m^2: kg. - 5603 11 10 -- Crop covers, conforming to IS 16718 kg. 20% - 5603 11 90 --- Other kg. 20% - 5603 12 00 -- Weighing more than 25g/m^2 but not more than 70g/m^2 kg. 20% - 5603 13 00 -- Weighing more than 70g/m^2but not more than 150g/m^2 kg. 10% 5603 14 00 -- Weighing more than 150g/m^2 kg. 20% - Other : 5603 91 00 -- Weighing not more than 25 g/m^2 kg. 10% - 5603 92 00 -- Weighing more than 25 g/m^2 but not more than 70 g/m^2 kg. 20% 5603 93 -- Weighing more than 70 g/m^2 but not more than 150 g/m^2 5603 93 10 --- Mulch Mats, conforming to IS 17355 kg. 10% - 5603 93 90 --- Other kg. 10% - 5603 94 --- Weighing more than 150 g/m^2....
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....10% - 6305 10 20 --- Jute corn (grains) sacks kg. 10% - 6305 10 30 --- Jute hessian bags kg. 10% - 6305 10 40 --- Jute sacking bags kg. 10% - 6305 10 50 --- Jute wool sacks kg. 10% - 6305 10 60 --- Plastic coated or paper cum polythene lined jute bags and sacks kg. 10% - 6305 10 70 --- Paper laminated hessian jute kg. 10% - 6305 10 80 --- Jute soil savers kg. 10% - 6305 10 90 --- Others kg. 10% - 6305 20 00 - Of cotton - Of man-made textile materials: kg. 10% - 6305 32 00 -- Flexible intermediate bulk containers kg. 10% - 6305 33 00 -- Other, of polyethylene or polypropylene strip or the like kg. 10% - 6305 39 00 -- Other kg. 10% - 6305 90 00 - Of other textile materials kg. 10% - 14. Mr. Lakshmikumaran also contended that the Authority for Advance Rulings [AAR] in the following cases had also held that polypropylene bags are liable to be placed under Tariff Heading 6305: (a) In the matter of U.S Polytech 2019 SCC Online WB AAAR-GST 18; ....
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....ga Flex Plastics Ltd & Anr v. Union of India & Ors 2023 SCC Online Cal 311. The Calcutta High Court, on the facts of the said case, while dealing with the aspect of classification of polypropylene leno bags under the 1975 Act, held that polypropylene leno bags were classifiable under Chapter 39 of the 1975 Act, rather than Chapter 63. Although the aforesaid decision presently forms subject matter of an appeal preferred before a Division Bench of the Calcutta High Court, no stay operates thereon. 20. Mr. Vajpai further referred to a decision handed down by a Division Bench of this Court in Praveen Mittal vs. UOI 2009 SCC Online Del 2643, in support of his contention that non-woven polypropylene bags were held to fall within the ambit of plastic bags. We note that in Praveen Mittal, the Division Bench had held as under:- "9. Having considered the arguments advanced on behalf of the parties, the key question that has to be answered is - whether the non-woven bags made out of polypropylene fibre would fall within the ambit of the expression "plastic bags"? It is an admitted position that the non-woven bags, which form the subject matter of this writ petition, comprise of 98....
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....e TRU, or it being recognized as being statutorily enabled to issue any clarification or directive under Section 168 of the CGST Act, the circular is liable to be quashed and set aside on this ground alone. 24. We note that both the petitioners as well as the respondents have referred to various decisions handed down by the AAR as well as the AAAR of different States. As noticed hereinabove, consequent to a failure on the part of respective counsels to place those decisions for our consideration, we are unable to form any opinion on the views that may have been expressed therein. 25. Notwithstanding the above, we are constrained to observe that divergent or contrary views that may be taken by the appropriate AARs' or AAARs' cannot be rendered a quietus by the issuance of a directive or clarification of the nature which was impugned before us. We, in this regard take note of the following pertinent observations as were rendered by the Supreme Court in Union of India & Ors vs.Bharat Forge Ltd & Anr 2022 SCC Online SC 1018 :- "50. In this regard, we must not overlook the consequences of reading the word may in the letter dated 05.09.2017 as casting a mandatory duty. Thi....
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....impugned direction. The power is vested with the Board, it is pointed out. The appellants have floated a global tender. It means that the bidders can be located at any place. The Officers, who would be the Jurisdictional Officers of the bidders, may not even be known to the appellant. 52. It is difficult to accept the case of the writ petitioner that appellants must seek the 'clarification' contemplated in the impugned Judgment by resorting to Section 168 of the Central Act or the State Act. Section 168 does not expressly provide for right to any person to seek a direction as contemplated therein. Further, we may notice that there is an express power provided in the provisions relating to advance ruling. There is an elaborate procedure to be followed and even right of appeal. At any rate, power under Section 168 is essentially meant for officers to seek orders, instructions or directions besides the Board itself on its own passing orders, in the interest of maintaining uniformity in the implementation of the Act. 53. We cannot ignore the case of the appellant that the Circular cannot bind the supplier and the Circular can be challenged in an appropriate proceeding....