TaxTMI 
TaxTMI 
2024 (1) TMI 974
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....'A' collectively referred to as 'Products' and the applicable IGST rate under sub-section (7) of Section 3 of the Customs Tariff Act read with Notifications issued on import of said 'products' for imports through the port of Chennai. 2. Applicant has stated as follows in their statement of relevant facts having a bearing on the question(s) raised enclosed with the CAAR-1 application: 2.1. The applicant, inter-alia, is engaged in the business of purchase and sale of said 'products' in India. The applicant has proposed to import said 'products' more specifically described in Table-A as under Table 'A' No. Item Description Width in MM 1 Nylon Taffeta Roll 45.00 2 Nylon Taffeta Roll 30.00 3 Nylon Taffeta Roll 127.00 4 Nylon Taffeta Roll 25.00 5 Nylon Taffeta Roll 25.00 6 Nylon Taffeta Roll 32.00 7 Nylon Taffeta Roll 64.00 8 Nylon Taffeta Roll 38.00 9 Nylon Taffeta Roll 40.00 10 Nylon Taffeta Roll 38.00 11 Nylon Taffeta Roll 32.00 12 Nylon Taffeta Roll 32.00 13 Nylon Taffeta Roll 25.00 14 Nylon Taffet....
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....ows: < https://www.hengxin-label.com) >, < https://king-grp.com>. 2.2 The products have following characteristics: • The products are made of manmade fibers textile fabrics • The products are not embroidered • The products are known as labels in common parlance and trade. The Indian suppliers are selling the rolls with HSN 580710. The copy of the invoice/ proforma invoice/ email issued by them for sale of rolls to Mean Light is attached with said application as Exhibit. • There is no alternate use of the products except as labels • The labels are stitched to products to provide information about washcare or supplier etc. The printing of such information is not legible & durable on the plain fabric and hence, a layer of coating has to be put to enable printing on the same. • The Rolls made-up of Taffeta has a polyamide coating of different thickness depending on the requirements of the customers. The polyamide coating on the product facilitates printing of the product/ washing information on the labels which is later stitched to the products. It is submitted that the coated/calendered side of the rolls ....
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....rel, household linen, mattresses, tents, soft toys or other goods. They are utilitarian labels bearing individual inscriptions or motifs. Such labels include, interalia, commercial tables bearing the trade name or trade mark of the manufacturer or the nature of the constituent textile (''silk", "viscose rayon ", etc.) and labels used by private individuals (boarding school pupils, soldiers; etc) to identify their personal property; the latter variety sometimes bear initials or figures or comprise sometimes a framed space to take a hand-written inscription. (B) Badges and similar articles of any textile material (including knitted). This category includes badges, emblems, "flashes", etc., of a kind normally sewn to the outer part of wearing apparel (sporting, military, local or national badges, etc., badges bearing the names of youth associations, sailors ' cap badges with the name of a ship, etc.). The above articles are classified in the heading only if the fulfil the following conditions: (1) They must not be embroidery. The inscriptions or motifs on the articles classified here are generally produced by weaving (usually broche work) or by p....
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...., made up of man made fibres i.e. Polyester Yarn and thus are squarely covered under tariff heading 5807 10 20. Therefore the impugned products merit classification under tariff heading 5807 1020." 3.2 Goods to be classified as understood in trade and common parlance The term 'labels' is not defined in the Customs Tariff. The applicant has submitted that the Hon. Bombay High Court in the case of M/s. Pharm Aromatic Chemicals reported in 1997(95) E.L.T. 203 (Bom.) in para 14 has observed as follows: 14. The principles that emerge from the above interpretation can be summed up thus: Where no definition is provided in the statute for ascertaining the correct meaning of a fiscal entry, the same should be construed as understood in common parlance or trade or commercial parlance. Such words must be understood in their popular sense. 'The strict or technical meaning or the dictionary meaning of the entry is not be resorted to. The nomenclature given by the parties to the word or expression is not determinative or conclusive of the nature of the goods. The same will have to be determined by application of the well-settled rules or principles of interpretation wh....
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.... the present case as well, labels are not specifically defined in the notification. The correct meaning of the same should be construed as understood in common parlance or trade or commercial parlance and that hair-spliting exercise to apply the technical terms or the dictionary meaning of the entry is not to be re sorted to. 3.3 Products are known as 'labels' in trade parlance In the present case, the applicant submits that the products proposed to be imported are treated as labels in the trade. It can be observed from the name / trade name of the supplier i.e. hengxin-label. Further, the applicant has made a local procurement of the Rolls within India and the same is supplied by the domestic supplier under the HSN 580710. In view of the above, it is submitted that it is well established by the applicant that the products proposed to be impelled are understood as 'labels' by the persons in the trade dealing with the subject goods. Therefore, applying to the ratio of the said judgments cited above, the applicant submitted that the subject products proposed to be imported shall mean 'labels' and are classifiable under the chap.er heading 580710. 3.4 ....
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....s a case under the Sales Tax law .- "In determining the meaning or connotation of words and expression describing an article or commodity the turnover of which is taxed in a sales tax enactment, if there is one principal fairly well settled it is that the words or expressions must be construed in the sense in which they are understood in the trade, by the dealer and the consumer. It is they who are concerned with it, and it is the sense in which they understand it that constitutes the definitive index of the legislative intention when the statute was enacted." That was also the view expressed in Geep Flashlight Industries Ltd. v. Union of India and Others - 1985 (22) E.L.T. 3. Where the goods are not marketable that principle of construction is not attracted. Indian Aluminium Cables Ltd. v. Union of India and Others - (1985) 3 S.C.C. 284 = 1985 (21) E.L.T. 3 (S.C.). The question whether thermometers, lactometers, syringes, eye-wash glasses and measuring glasses could be described as 'glassware' for the purpose of the Orissa Sales Tax Act, 1947 was answered by the Orissa High Court in State of Orissa v. Janta Medical Stores (1976) 37 STC 33 in the negative. To th....
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....at there cannot be any other use of this material, except for printing the labels and in the trade market under the catalogues, these plain strips are called labels. Learned Counsel for the respondent could not pointed out any use of the material produced in the court other than the use of the plain strips for purpose of printing labels. The material is known in the trade market as labels. We do not find any justification to put that material under the sub-heading 59.07. Sub-heading provides for woven fabrics of chapter 54 and not of plain weave woven strips of width 1.5 cm to 3.5 cm. Its correct heading should be 58.07 as that entry does not cover only the labels, but also the similar materials. 3.6 textile labels printed or otherwise are classifiable under HSN 580710:- CTH 580710 does not require a label to be printed for classification under the heading. Further, there is no such requirement in the chapter and section notes. The applicant relics on the below paras of the decision in the case of Bijay Kumar Poddar (supra). The High Court observed that if the unprinted label is not label in strict sense then in that case the material imported can be said similar to label. Th....
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....fined in the tariff. It is true that the word "Label" is not defined in the Tariff. However, in the Explanatory notes it is clearly stated that what constitutes a label. The same is reproduced below for ready reference: "Labels of any textile material (including knitted), These include labels of a kind used for marking wearing apparel, household linen, mattresses, tents, soft toys, or other goods. They are utilitarian labels bearing individual inscriptions or motifs. Such labels include, inter alia, commercial labels bearing the trade name or trademark of the manufacturer or the nature of the constituent textile ('"silk", "viscose rayon", etc.) and labels used by private individuals (boarding school pupils, soldiers, etc.) to identify their personal property; the latter variety sometimes bear initials or figures or comprise sometimes a framed space to take a hand-written Inscription." On plain reading of the above, it is evident that a label shall bear individual inscriptions or motifs viz. Trademark/ constituent textile etc. The explanatory notes clearly states the conditions for classifying the goods under the heading 5807. The same is reproduced below for ready r....
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....From the plain reading of the same, it is evident that only narrow woven fabrics (<30cm width) having the characteristics of woven labels, badges and similar articles, in strips are excluded from the scope of 5806 and covered under 5807. The imported goods are in roll form of various widths and not having any inscriptions or motifs to qualify as label and therefore the goods as is imported do not have the characteristics of a label. The Book "Customs Classification of Textiles and Textile Articles under HSN-Explanatory Notes" Authored by Shri. Ajay Kumar Gupta (IRS), who was a member of formulation of 8 digit HSN code for the textile commodities falling under Chapter 50-63, is one of the most referred books by various forums including DRI, CESTAT etc. It is interesting to find out the insights provided in this book in the subject matter regarding the labels. The same is reproduced below (as it is) for ready reference: "Label of this heading is a small piece of cloth attached to an article to designate its origin, owner, contents, use, or destination. It is also a distinctive name or trademark identifying a product or manufacturer. It may be woven, knitted or crochete....
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.... 1. If the rolls are woven and the width is less than 30 cm and not coated or coating is not visible to the naked eye, the goods are rightly classifiable under 58063200 as narrow woven fabrics made of manmade fibre. 2. If the rolls are woven and the width is more than 30 cm and not coated or coating is not visible to the naked eye, then the classification depends on the nature of the yam used as follows: a. If the yarn is filament yam, the goods are rightly classifiable under the CTH 5407 and at 8-digit level the classification depends on whether the goods are unbleached/bleached/dyed/printed. b. If the yam is spun yam. the goods are rightly classifiable under the CTH 5512 and at 8-digit level the classification depends on whether the goods are unbleached/bleached/dyed/printed. 3. If the rolls are coated with polyamide or any polymeric material and the coating is visible to the naked eye, the goods are rightly classifiable under 59039090. 4. If the rolls are of knitted fabric, the width is less than 30 cm and not coated or coating is not visible to the naked eye, then the goods are classifiable under 6003 3000. 5. If the....
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....eneral descriptors must be restricted to the same class, if any, of the specific words that precede them. In the present case, applying the principle of ejusdem generis, the term 'similar' shall mean same class of as 'labels' and 'badges' both. Accordingly, the term 'similar' shall apply to both 'labels' and 'badges'. The rolls proposed to be imported by the applicant do not have an alternate use other than labels. The Commissioner of Customs, Chennai, in his letter, has not highlighted any alternate use of the rolls proposed to be imported by the applicant. The Hon'ble Supreme Court in the case of Collector of Customs Vs. Kumudam Publications reported in 1997 (96) ELT 226 (SC) has held that it is not entirely correct to say that end use or function of the goods is irrelevant to decide the question of classification. A three Judge Bench of the Hon'ble Supreme Court had also relied upon the function and end use in the determining the classification in Indian Tool Manufacturers Vs. Asstt. Collector of Central Excise, Nasik & Others reported in 1994 (74) ELT 12 (SC). In the present case, the rolls are coated/processed sp....
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....that filed by the applicant. I therefore proceed to decide the present applications regarding classification of "Rolls made of Polyester, Nylon Taffeta, Satin etc. which are available with width ranges from 10 millimeter to 810 millimeter with printable feature more specifically described in Table 'A' (supra) collectively referred to as 'Products'" on the basis of the information on record as well as the existing legal framework having bearing on the classification of the products in question under the first schedule of the Customs Tariff Act, 1975. 6.1 In the recent ruling dated 17.01.2023 in the case of M/s. Mahaveer Impex which was passed on the question of classification of the same products i.e. "Rolls made of Polyester, Nylon Taffeta, Satin etc. available with width ranges from 10 millimeter to 810 millimeter with printable feature more specifically described in Table 'A' (supra) and collectively referred to as 'Products', Customs Authority for Advance Rulings has concurred with the submissions put forth by the the authorized representatives Shri S.S. Gupta, Advocate and Shri Vaibhav Shah, Advocate present for M/s. Mahaveer Impex. In the ins....
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....with wavy edges on one or both sides. (2) Strips of a width not exceeding 30 cm, cut (or slit) from wider pieces of warp and weft fabric (whether cut (or slit) longitudinally or on the cross) and provided with false selvedges on both edges, or a normal woven selvedge on one edge and a false selvedge on the other. They may also be created when a fabric is treated before it is cut into strips in a manner that prevents the edges of those strips from unravelling. No demarcation between the narrow fabric and its false selvedges need be evident in that case. Strips cut (or slit) from fabric but not provided with a selvedge, either real or false, on each edge, are excluded from this heading and classified with ordinary woven fabrics. (3) Seamless tubular warp and weft fabrics, of a width when flattened, not exceeding 30 cm. Fabrics consisting of strips with the edges joined to form a tube (by sewing, gumming or otherwise) are, however, excluded from this heading. (4) Bias binding consisting of strips, with folded edges, of a width, when unfolded, not exceeding 30 cm, cut on the cross from warp and weft fabrics. These products are cut from wide fabrics and not pr....
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....embroidery. The inscriptions or motifs on the articles classified here are generally produced by weaving (usually broche work) or by printing. (2) They must be in the piece, in strips (as is usually the case) or in separate units obtained by cutting to size or shape but must not be otherwise made up. This heading does not include labels, badges and similar articles, which have been embroidered (heading 58.10) or made up otherwise than by cutting to shape or size (heading 61.17, 62.17 or 63.07). 6.4. From the descriptions of the products as seen in Table-A above, I find that the same are of various type having sizes ranging from 10 mm to 305 mm, whereas in the CAAR-I application the applicant had mentioned sizes ranging from 10 mm to 810 mm. However, there is only one item in the list of products having width exceeding 300 mm, namely 'Iron on Taffeta Roll - 305 mm'. I also find a plethora of case laws/judgements cited by the applicant in furtherance of their case. 6.5. The products under reference have sizes ranging from 10mm to 305mm and can be considered as narrow woven fabric but for the exclusion clause whereby it is mandated that this heading excludes:....
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....gment on classification honorable High Court discussed few apex court decisions as follows: The apex court decision in the case of Atul Glass Industries Ltd. and Others v. Collector of Central Excise and Others - 1986 (25) E.L.T. 473 (S.C.) wherein para 8 their Lordships observed as under: - 8. The test commonly applied to such cases is: How is the product identified by the class or section of people dealing with or using the product? That is a lest which is attracted whenever the statute does not contain any definition........... It is generally by its functional character that a product is so identified...................... When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between the article and the need it supplies in his life. It is the functional character of the article which identifies it in his mind. In the case of a glass, mirror, the consumer recalls primarily the reflective function of the article more than anything else. It is a mirror, an article which reflects images. It is referred to as a glass mirror only because the word glass is descriptive of the mi....