2018 (7) TMI 391 – AUTHORITY FOR ADVANCE RULINGS, WEST BENGAL – 2018 (15) G. S. T. L. 90 (A. A. R. – GST) – Classification of goods – Polypropylene Leno Bags – Applicant is of the opinion that the PP Leno Bags manufactured is classifiable under Tariff Head 6305 33 00 of the GST Tariff which is aligned to the First Schedule of the Customs Tariff Act, 1975 – Held that:- To be included in Chapter 63, the width of the tapes, manufactured from Plastics or articles thereof of Chapter 39, used to weave the fabric should be less than or equal to 5mm and should not be impregnated, coated, covered or laminated with plastics or articles thereof, of chapter 39 – From the explanatory notes and clarification provided for determination of classification of goods it is seen that two more factors are to be considered, namely, the width of the tape used in the weaving and whether or not there is a layer/lining in these bags – The specifications of the PP Leno Bags being manufactured by the Applicant, t
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The officer concerned raises no objection to the admission of the Application. The Application is, therefore, admitted. 2. The Application states that the Applicant manufactures Polypropylene Leno Bags which are mainly used for packing of potato, onion, raw mango and other vegetables and citrus fruit in bulk. The Applicant also manufactures other woven Polypropylene bags which may be used for packing of cement, fertiliser and food grain. Ruling is, however, sought for the Polypropylene Leno Bags. The composition of these Polypropylene Leno Bags is. i) Polypropylene (hereinafter referred to as PP ) – 92% to 94%, ii) Linear Low Density Polyethylene (hereinafter referred to as LLDPE ) – 3% to 5% and iii) Colour Master Batch – 3% to 4%. The raw materials, namely, PP, LLDPE and Colour Master Batch, along with Additives, are fed into the Extrusion Tape line and the extruding film is slit and stretched to form strips (tapes). The strips or tapes are then, winded on bobbins which are fed into
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lanation provided by the Applicant for classifying the same product under Different Tariff Codes is that the Advance License issued to the Applicant by DGFT was for export under the Tariff Code 3923 29 90, whereas even though the Applicant had earlier cleared the same product in the domestic market under 3923 29 90 but later, started clearing the product under 6305 33 00, on being convinced that the later Tariff code was more specific. 4. The Applicant submits copies of the reports of test conducted by the Central Institute of Plastic Engineering & Technology dated 15.03.2018, the Indian Institute of Packaging dated 27.03.2018 and Indian Oil Corporation Ltd dated 12.03.2018 on his samples of PP Woven Leno Bags. The Applicant also submits a copy of IS 16187:2014 issued by the Bureau of Indian Standards, providing specifications for HDPE/PP Leno Woven Sacks for Packaging and Storage of fruits and vegetables. Since the above reports are specific to the samples provided by the Applican
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at providing capital for modernization of Indian textile industry, the product PP Leno Bags have been cleared from their factory under Chapter 39 (Plastics and Articles thereof) for the purpose of Central Excise and not under Chapter 63 (Other made up textile articles; sets; worn clothing and worn textile articles; rags). 6. Again, as per Advance License issued by the Directorate General of Foreign Trade, Calcutta, License No: 0210207709 dated 23.06.2017 it is seen that the Advance Authorisation was given for Articles made of polypropylene: Leno bags/sacks containing 100 MT polypropylene granules (ITCHS: 39232990). This License is valid for 18 months from the date of issuance, i.e. up to 22.12.2018. It is seen that during the same month, i.e., 27.06.207, barely 4 days after issuance of the Advance license by DGFT classifying the products under Chapter 39, the Applicant informs the Revenue that Tariff Heading under Chapter 63 is found to be more appropriate and specific and that they w
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e, or there is a significant difference in the PP Leno Bags which are being cleared for home consumption and which are being exported. It may be pertinent to note here that under GST the rate of Tax for Tariff Code 3923 29 90 is 18% while that of Tariff Code 6305 33 00 is 5%/12% depending on whether or not the sale value exceeds ₹ 1000/- per piece, and that prior to the implementation of GST, under the Central Excise regime the rate of Central Excise duty for items, both under Tariff Code 3923 29 90 and Tariff Code 6305 33 00 was 12.5%. 7. There is no specific Tariff Code for PP Leno Bags and/or Leno Bags. In the context of textiles the word Leno refers to a particular kind of weave in which the warp yarns are twisted together in pairs between the weft of filling yarns. 8. Tariff Sub Heading 3923 29 90 under the GST Tariff covers articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics, namely, sacks and bags (including co
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xtiles and textile products). There is no other criterion stated to exclude goods from being included as Plastics and articles thereof vis-a-vis Chapter 63. Again, Note 1(g) to Section XI of the Tariff Act states that the Section of Textile and Textile Articles covering Chapters 50 to 63 does not include, Monofilament of which any cross-sectional dimension exceeds 1 mm or strip or the like (for example, artificial straw) of an apparent width exceeding 5 mm, of plastics (chapter 39), or plaits or fabrics or other basket-ware or wickerwork of such monofilament or strip (chapter 46) Note 1 (h) to Section XI of the Tariff Act states that the Section of Textile and Textile Articles covering Chapters 50 to 63 does not include, Woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of chapter 39 10. Thus, to be included in Chapter 63, the width of the tapes, manufactured from Plastics or articles thereof of Chapter
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kaging and storage of fruits and vegetables should have range of width from 2.0 to 2.5 mm. IS 9755:2003, IS 14887:2014, IS 11652:2000 issued by the Bureau of Indian Standards lays down specifications for packing fertilizers, food grains and cements respectively, and it is seen that these bags are for PP Woven Sacks and not for PP Leno Woven sacks. Since, the Ruling sought for is specifically for PP Leno Bags, the BIS for fruits and vegetables is considered solely. 14. Therefore to classify the product PP Leno Bags both the Explanatory Notes, as well as the clarifications in the Tariff, and the specifications as per IS 16187:2014 should be taken into consideration. 15. Tariff head 6305 33 00 includes the goods that are classifiable as sacks and bags, of the kind used for packing of goods, made from polyethylene or polypropylene strips and the like that qualifies as man-made textile materials. Only those PP strips and the like are considered as textile materials width of which do not exc
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