2018 (11) TMI 663 – APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2018 (19) G. S. T. L. 159 (App. A. A. R. – GST) – Classification of goods – PP Leno Bags – whether classified under CTH 39232990 or under CTH 63053300 – Benefit of Duty Drawback – Doctrine of equitable estoppels – Held that:- Polypropylene Leno Bags are manufactured by the Respondent by weaving polypropylene strips (tapes). Polypropylene is a variety of plastic and it is a fact that the Respondent declared the Polypropylene Leno Bags voluntarily under Tariff Heading 3923 29 90 and enjoyed the duty drawback. No cogent reason could be offered by the Respondent as to why and how the Tariff Heading is now sought to be changed from 3923 29 90 to 6305 33 00.
–
Since the Respondent declared that Polypropylene Leno Bags manufactured by weaving polypropylene strips (tapes) under Tariff Heading 3923 29 90 for claiming duty drawback, and no explanation could be offered as to why the Tariff Heading should be changed now
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Ltd. 2. M/s. Mega Flex Plastics Ltd., holding GSTIN No. 19AADCM7598R1Z8, a manufacturer of Polypropylene Leno Bags (PP Leno Bags) having its factory at Polypark, Plot-PPD3, Village-Sandhipur, P.O.-Joynagar, Horwah-711302, in West Bengal (hereinafter referred to as the Respondent ), sought an Advance Ruling on the classification of PP Leno Bags under the GST Tariff which is aligned to the First Schedule of the Customs Tariff Act, 1975 (hereinafter referred to as the Tariff Act ). 3. The Advance Ruling Authority after considering Section Notes 1(g) and 1(h) of Section XI of the Tariff Act and specifications issued by the Bureau of Indian Standards ruled that TP Leno Bags', if specifically made from woven Polypropylene fabrics using strips or the like of width not exceeding 5 mm and without any impregnation, coating, covering, or lamination with plastics, are to be classified under Tariff Sub-Heading 6305 33 00. 4. The Appellant has filed an Appeal against the above Advance Ruling re
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ence issued by the DGFT, Kolkata on 23.06.2017 (valid for 18 months) classifying the said product under Chapter 39, the assessee without citing any reason to the department or seeking any amendment to DGFT, cleared the product in the domestic market under Tariff Heading 6305 33 00 instead of 3923 29 90. The suo motu change of Tariff Heading is clearly illegal and in violation of the Advance Licence Scheme. Now as the rate of tax has changed for the two Chapter Sub-Headings, the Respondent applied for Advance Ruling while the Chapter Sub-Heading of Advance Licence issued by DGFT is still in force. 5. During the course of the hearing the Appellant reiterated the points as stated in Grounds in Appeal. The Appellant stressed on the point that in spite of Advance Licence issued by the Directorate General of Foreign Trade (DGFT), Kolkata, (Licence No. 0210207709 dated 23.06.2017, valid for 18 months) classifying the Articles made of polypropylene Leno bags/ sacks containing 100 MT polypropyl
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
, then it will be excluded from the purview of Chapter 39 of the GST Tariff. (iii) In terms of Note 1(g) to Section XI of the Tariff Act states that the Section of Textiles 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). (iv) Note I(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 (v) IS 16187:2014 issued by the Bureau of Indian Standards specifies that, PP Leno Woven sacks for packaging and storage of fruits and vegetables. The Standard IS 16187:2014 classifies
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
t is stated that the reports are not to be reproduced without written approval, and that the report dated 27.03.2018 cannot be used for litigation, hence the above references are not considered as supporting evidence. 8. The matter is examined and arguments of Appellant and submissions made by the Respondent are considered. 9. Polypropylene Leno Bags are manufactured by the Respondent by weaving polypropylene strips (tapes). Polypropylene is a variety of plastic and it is a fact that the Respondent declared the Polypropylene Leno Bags voluntarily under Tariff Heading 3923 29 90 and enjoyed the duty drawback. No cogent reason could be offered by the Respondent as to why and how the Tariff Heading is now sought to be changed from 3923 29 90 to 6305 33 00. 10. Hon'ble Madhya Pradesh High Court while dealing with the classification of woven sacks made of HDPE tapes and fabrics in the matter of Raj Pack Well Ltd. vs Union of India [1993 (41) ECC 285; 1993; ECR 351 MP; [1990 (50) ELT 201
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ub-heading 5406.90. Similarly the HDPE sacks fall into Heading 39.23, sub-heading 3923.90… 11. The West Bengal Authority for Advance Ruling failed to take note of the aforesaid judgment of the Hon'ble Madhya Pradesh High Court which is squarely applicable in the instant case. Further, since the Respondent declared that Polypropylene Leno Bags manufactured by weaving polypropylene strips (tapes) under Tariff Heading 3923 29 90 for claiming duty drawback, and no explanation could be offered as to why the Tariff Heading should be changed now to 6305 33 00, it is not permissible under the doctrine of equitable estoppels that the Respondent is allowed to take such a divergent stand now. The Apex Court has consistently struck down such self-serving attitude as held in The Rajasthan State Industrial Development and Investment Corporation and Anr. vs. Diamond and Gem Development Corporation Ltd. and Am., AIR 2013 SC 1241 = 2013 (2) TMI 870 – SUPREME COURT OF INDIA. 12. In view of the abo
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =