2019 (1) TMI 420 – AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – TMI – Classification of goods – P.P. Bags which are made from strips having width of less than 5mm – whether the aforesaid PP bags would classify under chapter heading 63 or chapter 39 of the GST Tariff and what shall be the rate of GST on the same? – Notification No. F-A3-33-2017-1V (42) dt. 29.06.2017.
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Held that:- The issue of classification of PP/HDPE Bags or sacks, made of HDPE tapes and fabrics, has been dealt with at length by the Hon’ble High Court of Madhya Pradesh in case of M/s. Raj Packwell Ltd. Vs. UoI [1989 (9) TMI 120 – HIGH COURT OF MADHYA PRADESH AT INDORE], where it was held that HDPE strips or tapes fall under the Head. 39.20, sub-heading 3920.32 of the Central Excise Tariff Act and not under Head. 54.06, sub-heading 5406.90. Similarly the HDPE sacks fall into Heading 39.23, sub-heading 3923.90 – thus it can be concluded that the impugned goods viz. PP Woven Bags/Sacks shall be classifiable under
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refore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision under the MPGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. QUESTIONS RAISED BEFORE THE AUTHORITY- In the application the applicant raised following question that Determination of classification of sacks and bags made from man made textile materials under GST tariff No. 6305 which falls under Serial No. 224 of Scehdule-I of Notification No. FA3-33-2017-1-V (42) dated 29.06.17 issued vide Madhya Pradesh Gazette . However at the time of personal hearing the applicant himself admitted that the question raised was not very clear so amended the question as follow – Determining the classification of P.P. Bags which are made from strips having width of less than 5mm. It is to be decided by the Hon ble Advan
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the instant case, wherein the issue of classification of Sacks and Bags made out of Woven fabric}, already been decided. 5. The Hon ble Tribunal in the case of Gujrat Raffia Industries Ltd., V/s Commissioner of Central Excise = 2003 (1) TMI 146 – CEGAT, NEW DELHI has relied upon the decision of Hon ble Supreme Court in case of Commissioner of Commissioner of Central Excise Sup Shillong V/s Woodcraft Ltd., 1995 (77) ELT 23 (SC) = 1995 (3) TMI 93 – SUPREME COURT OF INDIA and has held that: any dispute relating to Tariff Classification must, as far as possible, be resolved with reference to nomenclature indicated by the HSN unless there be an expressed difference intentions indicated by the Central Excise Tariff Act, 1985 itself A reference to Explanatory Notes of HSN below Heading 63.06 covers a range of Textile articles usually made from strong industrially woven canvas. It, further mentions that tarpaulin are generally made of coated or uncoated manmade fibre, fabrics, or heavy to fair
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g 39.26 wherein it is mentioned that this Heading covers articles, not elsewhere specified or included, of plastic (as defined in Note I to the Chapter) or other materials of Heading 39.01 to 39.14. It is also observed by the hon ble CESATE that awnings which are specifically mentioned in Heading No. 63.06, if made of plastic, are classifiable under Heading 39.26 as Explanatory Notes of HSN. 6. Similarly, the Hon ble High Court of M. P. in the case of M/s. Raj Packwell Ltd., V/s Union of India = 1989 (9) TMI 120 – MADHYA PRADESH HIGH COURT has held that: In the Textiles Committee Act, 1963 (Act 41 of 63) the word fibre has been defined in Section 2 (a) as under: – fibre means man made fibre including regenerated cellulose rayon, roan, nylon and the like. Textiles has been defined in Section 2 (g) as under: – Textiles means any fabric or cloth, or yarn or gannent or any other articles made wholly or in part of- (i) Cotton; or (ii) Wool; or (iii) Silk; or (iv) Artificial silk or other fi
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Board has decided that so long as the finished articles of plastic is made out of plastic material falling under Tariff No. 15A (i), even if at the intermediate stage articles classifiable under Item No.15A (ii) if any tariff item emerges, the said product would be considered to have been produced out of plastic material falling under Tariff Item No. 15A (i) and, therefore, the HDPE woven sacks should be considered as articles of plastic, 7. In view of the above the Hon ble Court has concluded that HDPE strips or tapes fall under the Heading 39.20, sub heading 3920.32 of the Central Excise Tariff Act and not under Heading 54.06, sub heading 5406.90. Similarly the HDPE sacks fall under Heading 39.23, subheading 3923.90. 8. Hence following the above referred judicial pronouncement, the HDPE/LDPE/LLDPE Sacks 86 Bags, which is made out of plastics are classifiable under chapter 3923 and similarly, Sacks & Bags, which is made out of manmade textiles materials are classifiable under chap
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section notes, chapter notes and HSN Explanatory Notes are relevant : As per Notes given at Notification No. F-A3-33-2017-1-V (42) dt. 29.06.2017 – Explanation IV- The rules for the interpretation of the first Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the section and chapter Notes and the general Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. In view of above Explanation it is thus absolutely clear that for the purpose of classification the Customs Tariff Act, 1975 has to be resorted too as the none of the tariff under IGST, CGST OR SGST has any Chapter Notes or Tariff notes tor determining the classification of goods. 5.3 Section XI of Customs Tariff Act, 1975 i.e. Textiles and Textile Articles of the Customs Tariff Act, 1975 under Sr. No. 1 states as under : This Section does not cover: (a) ………………… (b) ……………&he
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s the goods as : 5404 – Synthetic monofilament of 67 decitex or more and of which no cross-sectional dimension exceeds I mm; strip and the like (for example, artificial straw) of synthetic textile materials of an apparent width not exceeding 5 mm. 5.5 Further explanation to Note 1 (b) to Chapter 54 under Customs Tariff also states that – The terms man-made , synthetic and artificial shall have the same meaning when used in relation to textile materials. 5.6 The heading 54.04 of HSN also states that the heading covers : Strip and the like, of synthetic textile materials. – The Strip of this heading are flat, of a width not exceeding 5 mm. either produced as such by extrusion or cut from wider strips or from sheets. 5.7 The fabric manufactured from the above strips has also been classified under chapter sub heading 5407 as Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404. From the above it is thus absolutely clear that the strips o
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lip;………… 6305 20 00 – Of cotton – Of man-made textile materials: 6305 32 00 – Flexible intermediate bulk containers 6305 33 00 – Other, of polyethylene or polypropylene strip or the Like 6305 39 00 – Other 6305 90 00 – Of other textile materials Also serial No. 224 of Notification No. F-A3-33-2017-1-V (42) dt. 29.06.2017 issued vide Madhya Pradesh Gazzette covers under chapter 63 the other made up textile articles and describes goods as under : Sr. No. 224 – Chapter Heading 63 Other made up textile articles, sets worn clothing and worn textile articles and rags, of sale value not exceeding ₹ 1000 per piece. 5.11 On the contrary 3923 of the Customs tariff covers the following goods : Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics. 5.12 The Applicant submits that they are manufacturing strips having width of less than 5 mm which undoubtedly falls under chapter 5404. Also the woven fabric
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ated, coated. covered or laminated with plastics or articles of plastics covered under Chapter 39 [Note 1 (h) to Section M]. 5.14 It is pertinent to mention that the erstwhile Central Excise Tariff is absolutely same to Customs Tariff. In the case of Sunpak 2016 (343) ELT 201 (Tri-Chennai) = 2016 (1) TMI 919 – CESTAT CHENNAI, the tribunal while deciding classification of goods under erstwhile Central Excise Tariff in respect of same goods held as under : Para 8. Heard both sides and perused the records. The issue involved in the present appeals is regarding classification of DHPE warp knitted fabrics, HDPE ropes, strips, rachal knitted fabrics for agro products and wastes made out of plastic strip less than 5 mm in width. There were different practices for classification of plastic woven bags within the country. The Madhya Pradesh High Court in the case of M/s. Raj Packwell Ltd. = 1989 (9) TMI 120 – MADHYA PRADESH HIGH COURT held that such bags are classifiable as other articles of pla
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The products under question in the present appeals are not plastic woven bags. These are knitted fabrics used as agro net. Hence distinct from the plastic bags considered in the earlier cases. By taking into account the changes in the scope of the tariff heading and the item under consideration recently the Ahmedabad Bench of the Hon ble Tribunal in the case of Flora Agrotech Vs. CCE Vapi (2014 (11) TMI 114 – CESTAT AHMEDABAD) has held that such knitted fabrics are classifiable under 60059000. In this decision, the previous decisions of Madhya Pradesh High Court and the Board Circular have been distinguished. The appellants have also obtained the following certificates for classification of their products: 1. Certificate from Central Institute of Plastics Engineering and Technology dated 19.01.2015. 2. Certificate from Textiles Committee, Mumbai dated 05.03.2013. 3. Certificate from Sasmira dated 01.03.2013. These certificates confirm that the fabrics manufactured by the appellants ar
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es it is relevant whether the CETA 1985, as existing now after its total alignment with the HSN, convey the meaning of Synthetic Textile Material. For this purpose, a reading of Chapter Note 1 of Chapter 54 of CETA 1985 is very relevant and is reproduced below:- Notes: 1. Throughout this Schedule, the term man-made fibres means staple fibres and filaments of organic polymers produced by manufacturing process, either: (a) by polymerization of organic monomers to produce polymers such as polyamides, polyesters, polyolefins or polyurethanes, or by chemical modification of polymers produced by this process [for example, poly(vinyl alcohol) prepared by the hydrolysis of poly(vinyl acetate)]; or (b) by dissolution or chemical treatment of natural organic polymers (for example, cellulose) to produce polymers such as cuprammonium rayon (cupro) or viscose rayon, or by chemical modification of natural organic polymers (for example, cellulose, casein and other proteins, or alginic acid), to produ
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A added to Chapter 54 of CETA 1985 was introduced w.e.f. 29.06.2010 and was made retrospective in operation. As per this chapter note filament yarn made from plastic or plastic waste have been considered to be textile materials. This amendment was not available in the statute books when judgment was delivered by M.P. High Court in the case of M/s. Raj Packwell Ltd. = 1989 (9) TMI 120 – MADHYA PRADESH HIGH COURT which was followed by Rajasthan High Court and CESTAT benches. It is an undisputed fact that the plastic strips used in making the Knitted Fabrics Shed Net is less than 5 mm width. As per Section Note 1(p) of Chapter 39 strip of plastic less than 5 mm in width is not classifiable under Chapter 39 of the CETA 1985. As per Section Note 1(g) of Section XI of the CETA 1985 strips or the like of plastic 5 mm less are classifiable in Section XI (Textile & Textile Articles). By virtue of tariff description under Tariff Heading 54.04 of CETA 1985 plastic strip or the like upto 5 mm
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than 5 mm. As per F.No.1(11)/2011/TTC/Vol.XX, dt.07.02.2012 written to the appellant by Assistant Director, Govt. of India, Ministry of Textiles, Office of the Textile Commissioner, Mumbai appellants unit has been registered as a technical textile unit in the records of the office of Textile Commissioner and has been allotted registration No.05152007. As per the Technical Textile literature issued by office of Textile Commissioner, Ministry of Textile, Govt. of India Agrotex includes technical textile products used in Agriculture horticulture (incl. floriculture), fisheries and forestry. Example of Agrotex technical textile include Shed nets, mulch mats, crop covers, anti hail nets, brid protection nets, fisheries nets etc. Further office of Joint DGFT Surat while issuing Authorisation No.5230009764 dt.15.11.2011 has held their product Warp Knitted Fabrics to be classifiable under ITCHS Code 60059000. As per Indian Standard ICS 59.080.70; 65.020.20 Agro Textiles-Shed Nets, for Agricu
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se Tariff Act 1985. The Applicant submits that in view of above interpretation of tariff and the order given by the authorities. the Applicant prays the Hon ble Advance Ruling Authority to give its ruling on classification of PP Bags/ Sacks and the applicable rate of GST. DISCUSSIONS AND FINDINGS: 6.1 We have carefully considered the submissions made by the applicant in the application as well as in the additional submissions. We have also taken into account the submissions made before us by representative of the applicant at the time of personal hearing. We are also seized of the departmental view submitted by the CGST & Central Excise, Commissionerate, Indore. On the basis of records placed before us and the rival submissions, we proceed to decide the Application. 6.2 At the outset, we find that the question raised by the applicant falls under the provisions of Section of the CGST Act, 2017/ MPGST Act, 2017 as it relates to question regarding classification of goods. Thus we find
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to be resorted to. However, we also observe that the applicant has been classifying the impugned product under Chapter 39 since long, and no cogent reason, whatsoever, has been adduced by the Applicant which prompted them to suddenly contemplate a change in established classification. Be that as it may, once we have admitted the application, we would venture into the subject keeping in view the technicalities and also the available judicial pronouncements. 6.5 We note that the applicant has very strongly built its case on the basis of Advance Ruling order passed by the learned Authority for Advance Ruling West Bengal in case of M/s. Mega Flex Plastics Ltd. Vide order no. 09/WBAAW2018-19 dtd.06.07.2018 [2018 (15) GSTL 90 (AAR – GST)] = 2018 (7) TMI 391 – AUTHORITY FOR ADVANCE RULINGS, WEST BENGAL, where under the learned WBAAR has ruled that similar goods viz. Leno Bags would be classifiable under Chapter 63. The relevant portion of the ruling which was in reference to LENO bags is as u
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e heavily relied upon the order of Learned WBAAR, we do not find any reason to discuss the same as it has been already set aside and reversed by the learned WB Appellate Authority for Advance Ruling. To say in other words, the very edifice of the arguments made in application has lost its existence. 6.7 Coming to the issue raised by applicant, we find that the issue of classification of PP/HDPE Bags or sacks, made of HDPE tapes and fabrics, has been dealt with at length by the Hon ble High Court of Madhya Pradesh in case of M/s. Raj Packwell Ltd. Vs. UoI [1990 (50) ELT 201 MP] = 1989 (9) TMI 120 – MADHYA PRADESH HIGH COURT. While deciding the identical issue, the Hon ble High Court has observed In the Textiles Committee Act, 1963 (Act 41 of 63) the word fibre has been defined in Section 2 (a) as under: – fibre means man made fibre including regenerated cellulose rayon, raon, nylon and the like. Textiles has been defined in Section 2 (g) as under: – Textiles means any fabric or cloth, o
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de. filament yarn but are articles of plastic. The circular of the Central Board of Direct Taxes dated 20.1.1985 also clearly says that the Board has decided that so long as the finished articles of plastic is made out of plastic material falling under Tariff No. 15A (i), even if at the intermediate stage articles classifiable under Item No.15A (ii) if any tariff item emerges, the said product would be considered to have been produced out of plastic material falling under Tariff Item No. 15A (i) and, therefore, the HDPE woven sacks should be considered as articles of plastic, Having so discussed the and defined the word Man Made Fibre and Textile for the purpose of arriving at the appropriate classification of HDPE Woven Bags/Sacks, the Hon ble High Court has opined; …………..the process of manufacture of HDPE tapes, the earlier judgments of the CEGAT approved by the Supreme Court and accepted by the department clearly go to show that HDPE bags are the bags woven by plastic strips
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hat the above said judgment having been passed by the High Court of Madhya Pradesh, is binding upon us as a matter of judicial discipline and we neither have any reason nor locus standi to disagree with the same. 6.9 To fortify our finding we also draw support from the judgment of the Hon ble Tribunal in the case of M/s. Gujrat Raffia Industries Ltd., v/s Commissioner of Central Excise on 14.1.2003 [Reported in 2003 (153). ELT 336 (Tri-Dell] = 2003 (1) TMI 146 – CEGAT, NEW DELHI. The Hon ble Tribunal in this matter has also held classification of similar goods under chapter 39 instead of chapter 63. 6.10 Following the ratio of the judgment of Hon ble High Court of Madhya Pradesh in case of M/s. Raj Packwell Ltd. Vs. UoI [1990 (50) ELT 201 MP] = 1989 (9) TMI 120 – MADHYA PRADESH HIGH COURT as well as order dtd. 25.10.2018 = 2018 (11) TMI 663 – APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL of the learned West Bengal Appellate of Advance Ruling in case of M/s. Mega Flex Plastics Ltd
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