2019 (8) TMI 1215 - AAR - GST

Classification of goods - tarpaulins made from High Density Polyethylene - whether classifiable as textile under Section Xl of the First Schedule of the Customs Tariff Act, 1975 and, if so, whether it is classifiable under HSN 6306, 6301 or 5903 of the Tariff Act? - HELD THAT - Tarpaulin made from HDPE woven fabric is a composite of plastics and textile. It combines a plastic component with textile material. Classification of such composite goods is governed by Note 1 (h) to Section Xl (Textile and Textile Articles) and Note 2 to Chapter 59. A combined reading of the two notes reveals that a woven fabric if completely embedded in plastics or entirely coated or covered on both sides with such material, and if such coating or covering can be seen with the naked eye, is not to be treated as textile material for classification under the Tariff Act (refer to the Explanatory Notes to Chapter 39 of the Harmonised System of Nomenclature, Brussels). Tarpaulin made from HDPE woven fabric of the variety the Applicant supplies, therefore, is not tarpaulin made from textile material, and not to be classified under Heading 6306. The tarpaulin the Applicant supplies is made from HDPE woven fabrics, coated or covered with LDPE melt. Heading 5903 and Note 2 to Chapter 59 are relevant for ascertaining whether the above fabric is textile material. Had it been so, the tarpaulin made from such material would have been classifiable under Heading 6306 - The fabric being no textile material, the question of classifying the tarpaulin made from it as a madeup textile article under Heading 6301 does not arise.

Summary

Issues:
1. Admissibility of the Application
2. Submissions of the Applicant
3. Observations and findings of the Authority

Admissibility of the Application:
The Applicant, a manufacturer of tarpaulins made from HDPE woven fabric, seeks a ruling on the classification of "HDPE Woven Tarpaulin" under the Customs Tariff Act. The question's admissibility under Section 97(2)(a) of the GST Act is established. The Application's admission is challenged by the concerned officer based on a previous ruling for another applicant. However, the Authority rules that the proviso cited by the officer does not restrict the Applicant from seeking a ruling on the same question. The Application is admitted as the ruling for another applicant is not binding on the current Applicant.

Submissions of the Applicant:
The Applicant describes the manufacturing process of tarpaulins from HDPE woven fabric and argues that mere coating with plastic should not exclude them from being classified as textiles. The Applicant cites relevant notes from the Tariff Act to support their position. They also contend that items made from plastics should not be classified as plastics post-manufacturing, referencing legal precedents. The Applicant presents detailed explanations and samples to support their classification argument under different chapters of the Tariff Act.

Observations and findings of the Authority:
The Authority delves into the classification of tarpaulins made from HDPE woven fabric as a combination of plastics and textiles. They analyze relevant notes and specifications to determine the nature of the fabric. The Authority examines samples provided by the Applicant and concludes that the coated HDPE fabric does not qualify as a textile material. Previous rulings on similar matters are considered, leading to the conclusion that the tarpaulins in question do not fall under specific headings of the Tariff Act. The ruling states the fabric used is not textile material, thus excluding the tarpaulins from being classified under certain headings.

In summary, the judgment addresses the admissibility of the Application, the Applicant's detailed submissions regarding the manufacturing process and classification arguments, and the Authority's thorough analysis leading to the ruling that the HDPE fabric used does not qualify as textile material for classification purposes under the Tariff Act.