In Re: M/s. Utkal Polyweave Industries (P) Ltd.,
GST
2018 (12) TMI 1090 – AUTHORITY FOR ADVANCE RULING, ODISHA – 2019 (21) G. S. T. L. 108 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, ODISHA – AAR
Dated:- 16-11-2018
Order No. 05/ODISHA-AAR/2018-19
GST
SRI ANAND SATPATHY, AND SRI NILANJAN PAN, MEMBER
Present for the Applicant: Shri Vinay Kumar Shraff, Advocate. Shri B. Maharana, Asst Manager (Com) of the Company
Subject: GST Act, 2017-Advance Ruling U/s 980n 'Classification of Polypropylene Leno Bags'
1.0 M/s. Utkal Polyweave Industries (P) Ltd., 26-Ganeswarpur Industrial Estate, Januganj, Balasore-756019, Odisha (hereinafter referred to as the 'Applicant') assigned with GSTIN 21AAACU3799H1Z8 having registered address at 26-Ganeswarpur Industrial Estate, Januganj, Balasore-756019, Odisha have filed an application on 28.08.2018 under Section 97 of CGST Act, 2017 & OGST Act, 2017 read with Rule 104 of CGST Rules 2017 & OGST Rules, 2017 in Form GST ARA-01 seeking
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3% to 4%.
2.2 That the manufacturing process includes manufacturing of polypropylene strips (tapes). PP Strips (tapes) Bobbin are fed on the loom and PP Leno Fabric is manufactured by weaving and than fabric is rolled in a Roll. The warp strips are twisted together in pairs between the weft of filing strip. Leno fabric is then rolled and fabric rolls are cut into desired length which is converted to form a bag (sacks).
2.3 That chapter heading 6305 relates to Sacks and bags, of a kind used for packing of goods. Further sub heading 63053300 relates to Sacks and bags, of a kind used for packing of goods made from manmade textile materials of polyethylene or polypropylene strip or the
2.4 That 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
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alf of the company. He re-iterated the earlier submission made in the application. During personal hearing, it was reported that earlier (before implementation of GST), P P Leno Bags were cleared under chapter 39 of the GST Tariff heading. However, during personal hearing the Ld. Advocate submitted additional written submission wherein he argued that 'wrong classification of the goods at one stage does not operate as estoppels/res judicata for subsequently claiming correct classification'. In this regard, he placed reliance on the judgments of Hon'ble Delhi Tribunal in the case of Commissioner of Central Excise, Bhopal Vs. Mahakoshal Potteries reported in 2005 (183) E.L.T.289 (Tri-Del) = 2005 (2) TMI 183 – CESTAT, NEW DELHI and Several Judgments of other Tribunals.
3.1 The Jurisdictional Officer of State GST & the jurisdictional Officer of Central GST appeared in person. The officer concerned of CGST informed that in the similar case, the West Bengal Authority for Advance Ruling Goods
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P Leno Bags' under GST Tariff heading. The applicant contended that the said goods are coming under chapter heading 63053300. In this regard, they have submitted copies of the reports of test conducted by the central institute of plastic engineering & technology dated 26.07.2018 and the Indian institute of packaging dated 02.08.2018 on their samples of P P Leno Bags. Further, the applicant also submitted a copy of IS 16187:2014 issued by the Bureau of Indian Standards, providing specifications for P P Leno Woven Sacks for packaging and storage of fruits and vegetables.
4.2 Notwithstanding the aforementioned certification by different certifying agencies, the issue for consideration by this forum is simply to determine the relevant HSN Code under which the goods manufactured by the applicant for supply is classifiable. This forum is not mandated to give any opinion on the standard or manufacturing process of the product manufactured by the applicant. In this regard, the goods manufact
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th plastics, or articles thereof, of Chapter 39;”
This implies that Goods/Articles covered under Chapter 39 are not to be classified under any of the Chapters falling under Section XI. It further implies that articles of plastics specified under Chapter 39, even if woven are not to be classified under any of the Chapters including Chapter 63 falling under Section XI.
4.4 In Chapter 39, in Tariff heading 3923, under sub-heading 39232990, PP sacks and bags are very well covered. There being a clear sub-heading in Chapter 39 assigned to PP Sacks and bags, the same can not be included in Chapter 63 and more specifically under subheading 63053300
4.5 The applicant has placed reliance on order no. 09/WBAAR/2018-19 dated 06.07.2018 = 2018 (7) TMI 391 – AUTHORITY FOR ADVANCE RULINGS, WEST BENGAL of the West Bengal Authority for Advance Ruling, Goods and Service Tax in the case of M/s. Mega Flex Plastic limited, Howrah, wherein, the authority, classified “P P Leno bags” under Tariff sub head
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he HDPE bags are the bags woven by the plastic strips and they, therefore, are goods of plastic and the materials used for weaving those bags being the strips of plastic made from plastic granules, the strips of plastic used for weaving the aforesaid HDPE woven sacks has to be classified as an item under entry 39.20 of Chapter 39 and not under entry 54.06 of chapter 54. Accordingly, the entries of the finished goods have also to be made under the proper chapter of the Tariff Act treating them as the finished goods made of plastic strips.
In the result we hold that HDPE strips or tapes fall under the Heading 39.20 subheading 3920.30 of the Central Excise Tariff Act and not under Heading 54.06, sub-heading 5406 90. Similarly the HDPE sacks fall into Heading 39.23, sub-heading 3923.90″
4.7 Tariff heading 3923 includes goods that are classifiable as 'Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics'. Polypropylene Le
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he exclusion in the Chapter Note I(h) appearing under Chapter X', Woven Fabrics and articles thereof specified under Chapter 39 are not to be covered by the articles mentioned against the heading 63053300.
4.8 Further, as per the existing CBEC Revised Duty Drawback rates schedule applicable w.e.f. 01.10.2017, “polypropylene woven fabrics/bags/sacks, whether or not laminated, with or without C.V. stabilization, with or without liners/fasteners” are specifically classified under drawback chapter 39 under Tariff Item 392302 The item under consideration being woven bags of polypropylene therefore merits classification under this Chapter as it stands today without any ambiguity.
RULING
In view of the foregoing discussions, we pass the following ruling
The item “Polypropylene Leno Bags (PP leno Bags)”, be classified under GST Tariff Heading '3923 29 90'.
The instant application stands disposed of accordingly.
The applicant or the jurisdictional officer, if aggrieved by the ruling given
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