TaxTMI 
TaxTMI 
2026 (9) TMI 1511
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....39; and the applicable IGST rate under sub-section (7) of Section 3 of the Customs Tariff Act, 1975 read with Notification issued on import of the said 'products' for imports through the ports of Chennai and Bangalore. 2. Applicant's eligibility for Advance Ruling: The applicant holds a valid IEC No. ABEFG3056B and therefore qualifies as an "applicant" under Section 28E(c) of the Customs Act' 1962. The questions on which the advance ruling is sought is in respect of classification and the applicability of IGST of goods under the Customs Tariff Act' 1975 which is admissible under Section 28H (2). The applicant has declared that the questions raised in the present application is not pending in the applicant's own case before any officer of customs, the appellate tribunal, or any Court and is not a matter already decided by the appellate tribunal or any court. Accordingly, the application appears admissible under Section 28-I of the Customs Act, 1962. 3. Questions on which Advance Ruling is required: Question 1. Whether the products proposed to be imported can be classified under CTH 58071090 of the First Schedule to the Customs Tariff Act, 19....
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....Tape Recycled Nylon Taffeta Thermal 10, 12, 19, 25, 28, 30, 32, 35, 40, 45, 51, 64, 76, 102, 204, 300 12 Label Tape Recycled Micro Fibre Taffeta 10, 12, 19, 25, 28, 30, 32, 35, 40, 45, 51, 64, 76, 102, 204, 300 13 Label Tape Recycled Single Side Satin White 10, 12, 19, 25, 28, 30, 32, 35, 40, 45, 51, 64, 76, 102, 204, 300 14 Label Tape Recycled Single Side Satin Black 10, 12, 19, 25, 28, 30, 32, 35, 40, 45, 51, 64, 76, 102, 204, 300 15 Label Tape Recycled Single Side Satin 10, 12, 19, 25, 28, 30, 32, 35, 40, 45, 51, 64, 76, 102, 204, 300 16 Label Tape Recycled Double Side Satin 10, 12, 19, 25, 28, 30, 32, 35, 40, 45, 51, 64, 76, 102, 204, 300 4.3 The applicant vide email dated 09.04.2026 requested their supplier M/s. Zhejiang King Label Technology Co. Ltd. to provide a quotation for the products. The applicant's supplier has classified the products under HSN code 58071090. The Company has received communication vide email dated 20.04.2026 from supplier for the same. 4.4 As per First Schedule of Customs Tariff Act, 1962, the basic customs duty for goods falling under HSN 5807 1090 is 10%. Similarly, as per entry no. 370 of Sc....
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....807 10 -Woven : 5807 10 10 --- Of cotton 5807 10 20 --- Of man-made fibre 5807 10 90 --- Other 5807 90 - Other : 5807 90 10 --- Felt or non-woven 5807 90 90 --- Other 4.8 As per the World Customs - HSN code, the chapter heading 5807 covers labels of any textile material subject to conditions. The relevant extract is reproduced below: "58.07 - Labels, badges and similar articles of textile materials, in the piece, in strips or cut to shape or size, not embroidered. 5807.10 - Woven 5807.90 - Other Subject to the conditions specified below this heading covers: (A) Labels of any textile material (including knitted). These include lables 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, interalia, commercial lables 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;....
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.... Taffeta roll, Single side slit polyester satin roll, double side slit polyester satin roll, Single side woven edge polyester satin roll, Double side woven edge satin roll, Single side slit polyester cotton roll. Recyclable Single side slit polyester satin etc. which are available with width ranges from 10 millimetre to 305 millimetre more specifically described in as under in Table 'A' (supra) collectively referred to as 'Products' proposed to be imported by the applicant merit classification as articles similar to label of textile material in strips under CTH 5807 according to their constituting materials and design of the Customs Tariff. Accordingly, the subject goods as reflected in Table 'A' are classifiable at 8-digit level under CTI 5807 1010 (of cotton), 5807 1020 (of man-made fibre) & 58071090 (other) according to their composition and characteristics. The above said 'products' are covered by entry no. 153 of Schedule II of Notification 1/2017 - IGST (Rate) 28 June 2017. 4.12 The relevant extract of Ruling in the case of M/s Meanlight - CAAR/MUM/ARC/05/2024 dated 16-01-2024 Para 7 of the Ruling on page - 18 "7. On the ba....
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....4 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 which have been referred to as ."common parlance" rule, "trade or commercial parlance" rule, "common sense rule of interpretation" and "user test". The application of the principles will again depend on the facts and circumstances of each case. No test or tests can be said to be of universal application. Each case will have to be decided by applying one or more rules of interpretation depending upon the facts of that particular case." 4.17 Further, the Supreme Court in the case of Dunlop ....
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....ed are treated as labels in the trade. It can be observed from the name / trade name of the supplier i.e. Zhejiang King Label. The website link of the supplier providing end use of the products here - https://www.king-grp.com 4.22 In view of the above, it is submitted that it is well established by the applicant that the products proposed to be imported are understood as 'labels' by the persons in the trade dealing with the subject goods. Therefore, applying the ratio of the said judgments cited above, it is submitted that the subject products proposed to be imported shall mean 'labels' and are classifiable under the chapter heading 58071090. Functional Test 4.23 The Hon. Supreme Court in the case of Atul Glass Industries Ltd. 1986 (25) E.L.T. 473 (S.C.) has held that classification of the product can also be based on functional test i.e. the function the product performs. In this case the dispute was classification of Screens fitted in motor vehicles as wind screens, rear screens and door screens. The court observed as follows while approving the classification as part of car. 8. The test commonly applied to such cases is: How is the product ident....
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.... 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 the same effect is the decision of this Court in Indo International Industries V. Commissioner of Sales Tax, Uttar Pradesh, (1981) 3 S.C.R. 294 = 1981 (6) E.L.T. 325 (S.C.), where hypodermic clinical syringes were regarded as falling more accurately under the entry relating to "hospital equipment and apparatus" rather than under the entry which related to "glasswares" in the U.P. Sales Tax Act. 4.24 Thus, it is submitted that the classification of any product is based on ultimate function which it performs....
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....0 specifically covers all the products used as labels or similar articles. 4.33 It is submitted that the products proposed to be imported by the applicant do not have an alternate use other than as labels. 4.34 The Hon'ble Calcutta High Court in the case of M/s Bijay Kumar Poddar vs Union of India 2000 (126) ELT 393 (Calcutta) has held that sub-heading 5807 provides and covers labels and similar articles. In this case the dispute was of classification of 'reels of 250 yards each of textile fabrics'. "25. The facts are not in dispute that the petitioner has imported plain label strips described as cloth for printing. The sample of that material also produced in the Court and learned Counsel submits that 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-hea....
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....fic marking for cutting then the same will have a limited application and can be used only by a particular customer/ industry. However, the applicant will import the Rolls and then identify the customer, and hence, the Rolls cannot come with a specific cut marking. 4.44 It is submitted that the Rolls without marking shall also be meant for use labels and hence, it is classifiable under CTH 58071090. 4.45 In view of above submission, the applicant submits that the Rolls are classifiable under CTH 580710 and subject to basic customs duty of 10% under the First schedule of the Customs Tariff Act, 1975 and IGST of 5% under entry 370 of Schedule I of Notification 9/2025-IGST (Rate) dated 17 September 2025. Customs duty rate and IGST rate shall be as applicable to HSN 58071090 4.46 The applicant believes that the products proposed to be imported by the applicant falls under HSN 58071090. 4.47 Hence, the customs duty rate and IGST rate shall be as follow: Tax Rate Tariff Entry or Serial no of Notification Basic Customs Duty 10% As per First Schedule CTH 58071090 IGST 5% Entry 370 of Schedule I of Notification 9/2025-IGST (Rate) dated 17 September ....
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.... the Customs Tariff Act, 1975, sub-heading 580710 covers "Woven" labels, and within this, CTI 58071020 specifically covers woven labels "of man-made fibre". Therefore, applying Rule 3(a) of the General Rules for the Interpretation of the Import Tariff, the goods strictly merit classification under the specific entry CTI 58071020 rather than the residual/general entry CTI 58071090 ("Other"), subject to standard physical verification at the time of import to confirm the goods match the declared material composition. * Applicability of IGST Notification: If classified under CTI 58071020, the goods would be covered under Entry No. 370 of Schedule I of Notification 9/2025 - IGST (Rate) dated 17 September 2025, attracting an IGST rate of 5%. This Commissionerate is in agreement with the applicant's interpretation on the applicability of this tax rate. C. Comments regarding pendency at Legal or Review stage: As per the verification reports received from the Legal and Review Sections of this Commissionerate, no case relating to the questions raised in the present Advance Ruling application is pending before any Customs Officer, the Appellate Tribunal (CESTAT), or any ....
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....ue for determination in the present application is the classification of the rolls of man-made textile material proposed to be imported by the applicant, as detailed in "Table-A" (supra) having different width. 8.3 The applicant submitted that the goods proposed to be imported are textile materials presented in rolls comprising various types of manmade fibers textile fabrics including Nylon Taffeta, Polyester Satin, Satin, Acetate Taffeta, Dip Coated Taffeta, Hot Melt Fusing Taffeta, Dull Polyester Satin and recycled variants thereof etc. The goods are proposed to be imported in different widths. The products are stated to be non-embroidered and depending upon their type, may be coated or otherwise processed on one or both sides to facilitate printing and to impart the requisite surface characteristics. 8.4 The applicant further submitted that the subject products are known as labels in common parlance & trade and Indian suppliers are selling the rolls with HSN 58071090. The subject products are specifically manufactured and supplied for use as labels on garments. They are intended to carry information such as trademark/brand name, wash-care instructions, country of manufactu....
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....- Woven pile fabrics (including terry towelling and similar terry fabrics) and chenille fabrics 5806 20 00 - Other woven fabrics, containing by weight 5% or more of elastomeric yarn or rubber thread - Other woven fabrics: 5806 31 -- Of cotton: 5806 31 10 --- Typewriter ribbon cloth 5806 31 20 --- Newar cotton 5806 31 90 --- Other 5806 32 00 -- Of man-made fibres 5806 39 -- Of other textile materials: 5806 39 10 --- Goat hair puttis tape 5806 39 20 --- Jute webbing 5806 39 30 --- Other narrow fabrics of jute 5806 39 90 --- Other 5806 40 00 - Fabrics consisting of warp without weft assembled by means of an adhesive (bolducs) 8.8 In order to understand the scope of tariff heading 5806 it is essential to refer to the HSN Explanatory notes to CTH 58.06 which provide as under: - (A) Narrow Woven Fabrics In accordance with Note 5 to this Chapter, this heading includes as narrow woven fabrics: (1) Warp and weft fabrics in strips of a width not exceeding 30 cm, provided with selvedges (flat or tubular) on both edges. These articles a....
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....arrow woven fabrics, subject to the specific exclusions provided therein. The HSN Explanatory Notes clarify that narrow woven fabrics which are more specifically covered by other headings are excluded from the scope of Heading 5806. In particular, woven labels, badges and similar articles in strips are specifically excluded from Heading 58.06 and are covered under Heading 5807 or 5810, as applicable. Thus, the mere fact that the subject goods are narrow woven textile materials does not make their classification under heading 5806. Accordingly, where the subject goods possess the essential characteristics of woven labels, badges or similar articles, their classification is required to be examined under Heading 58.07 rather than Heading 58.06. 8.10 Chapter heading 5807 covers labels, badges and similar articles of textile materials, in the piece, in strips or cut to shape or size, not embroidered. 5807 10 - Woven 5807 10 10 --- Of cotton 5807 10 20 -- *Of man-made fibre 5807 10 90. --- Other 5807 90 - Other: 5807 90 10 --- Felt or non-wovens 5807 90 90 --- Other Heading 58.07 of the First Schedule of the Customs Tariff Act, 1975 covers ....
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.... linen, mattresses, tents, soft toys or other goods. Such labels are utilitarian articles bearing individual inscriptions or motifs and include commercial labels bearing the trade name or trade mark of the manufacturer or other information relating to the goods. The HSN Explanatory Notes further provide that the articles covered by Heading 58.07 must not be embroidered and must be in the piece, in strips or in separate units obtained by cutting to size or shape, and must not be otherwise made up. 8.13 In the present case, the goods proposed to be imported are textile rolls made of woven man-made textile materials such as Nylon Taffeta, Polyester Satin, Satin, Acctate Taffeta, Dip Coated Taffeta, Hot Melt Fusing Taffeta, Dull Polyester Satin and recycled variants thereof etc. The applicant has submitted that the goods are specifically intended for use as labels on garments for displaying the trademark, wash-care instructions, country of manufacture, size, make and other information for the customers. The applicant has further submitted that the goods are not embroidered and are imported in rolls in specified widths. From the descriptions of the products as seen in Table-A above, ....
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...., while the heading itself covers labels, badges and similar articles of textile materials, in the piece, in strips or cut to shape or size, not embroidered. Therefore, the absence of printing on the subject goods in their imported condition cannot be considered conclusive against their classification under Heading 5807, particularly when the goods are specifically manufactured and supplied for use as labels and are intended to carry the relevant information after importation. 8.17 In this regard, I find support from the decision of the Hon'ble Calcutta High Court in M/s Bijay Kumar Poddar v. Union of India, 2000 (126) E.L.T. 393 (Calcutta). The Court has held plain label strips as "labels" considering that it is meant for printing and there is nc alternate use of the same. The related sub-heading 5807 provides and covers labels and similar articles. The relevant portion of paragraph 25 of the judgment is reproduced below: "25. The facts are not in dispute that the petitioner has imported plain label strips described as cloth for printing. The sample of that material also produced in the Court and learned Counsel submits that there cannot be any other use of this ma....
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....ation in the popular sense, which is the sense attributed to it by those people who are conversant with the subject matter that the statute is dealing with. This principle should commend to the authorities as it is a good fiscal policy not to put people in doubt or quandary about their tax liability. The common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law-maker." 8.20 Applying the aforesaid principles to the facts of the present case, I find that the subject goods are specifically manufactured and supplied as label tapes and are intended to be used for displaying the trade mark, brand name, wash-care instructions, country of manufacture, size, make and other particulars relating to the garment or other product. The applicant has also submitted that the subject goods have no alternative use as ordinary textile fabrics and are specially processed or coated to facilitate durable printing. Thus, their functional character and intended use establish that the subject goods are articles in the nature of labels or similar articles rather than ordinary narrow woven fabrics. 8.21 I further find that the express....
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....goods are rightly classifiable under Heading 5807. 8.24 I further find that a similar issue was examined by the Customs Authority for Advance Rulings, Mumbai in M/s Mahaveer Impex, Ruling No. CAAR/Mum/ARC/01/2023 dated. 17.01.2023, wherein rolls made of polyester, taffeta, satin etc., having widths ranging from 10 mm to 810 mm and intended for use as labels, were held classifiable under Heading 5807. 8.25 Similarly, in M/s Mean Light Co., Ruling No. CAAR/MUM/ARC/05/2024 dated 16.01.2024, rolls made of polyester, nylon, taffeta, satin etc., having widths ranging from 10 mm to 810 mm and possessing printable features, were held to merit classification under Heading 5807. 8.26 Further, in the case of M/s Fancy Ribbon House, Ruling No. CAAR/MUM/ARC/192,193/Mumbai dated 03.01.2025, rolls of nylon taffeta, polyester taffeta, tearaway taffeta, iron-on fusing taffeta, polyester satin and similar textile rolls, having widths ranging from 10 mm to 305 mm and intended for use as labels, were held classifiable as articles similar to labels of textile material in strips under Heading 5807, with classification at the 8- digit level according to their composition and characteristics. ....
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..... The said Commissionerate has accordingly opined that, subject to physical verification, the subject Products merit classification under CTI 5807 1020 - Of man-made fibre rather than CTI 5807 1090. 8.33 I find that the aforesaid observation of the jurisdictional Commissionerate is relevant for determining the appropriate eight-digit classification. The Applicant, vide letter dated 11.09.2026, has further confirmed that the Products detailed in Table-A are woven and has concurred with the classification proposed by the jurisdictional Commissionerate. 8.34 The relevant tariff entries under Heading 5807 are reproduced below for ready reference: 5807 covers labels, badges and similar articles of textile materials, in the piece, in strips or cut to shape or size, not embroidered. 5807 10 - Woven 5807 10 10 --- Of cotton 5807 10 20 --- Of man-made fibre 5807 10 90 ---- Other 5807 90 - Other: 5807 90 10 --- Felt or non-wovens 5807 90 90 --- Other I find that sub-heading 5807 10 specifically covers woven labels, badges and similar articles of textile materials. Within the said sub-heading, CTI 5807 10 ....