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TMI Blog2019 (3) TMI 1472X X X X Extracts X X X X X X X X Extracts X X X X ..... als including strips and the likes of plastics as per Chapter Note 1 of chapter 46 and the terms of heading 4601 that covers plaiting materials bound together in parallel strands or woven in sheet form as finished articles (for example, mats, mattings, screens) - In the instant case we find that the extruded fine plastic tubes are woven into sheet forms and finished into articles as mats and hence covered in heading 4601. We further find from the note to heading 4602 that the mats being products of plaiting materials, which have acquired the character of finished articles by reason of being bound together in parallel strands or woven in sheet form, are excluded from the scope of heading 4602. Hence the items in question do not go beyond the heading 4601. Circular No. 4/2018 dated 24.01.2018, amending All Industry Rates of Duty Drawback effective from 25.01.2018 (Customs) issued from File No. 609/12/2018- DBK re-confirms the classification of Polypropylene Mats under tariff Item 460101 in Part 2 (c) of the same and deletes any other entry from the drawback schedule for Polypropylene Mats. On comparison of the HSN and First Schedule to the Indian Customs Tariff, we find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 27/2017) is to be applied or Entry No. 103 should be considered. In other words, whether CGST / SGST Tax Rate is to be considered as 2.5% or 6% ? At the outset, it is made clear that unless specified otherwise, a reference to a Section or Provision of the CGST Act shall also mean a reference to the same Section or Provision under the MGST Act. Further, a reference to GST Act shall mean a reference to CGST Act and MGST Act. 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- 1. Shradha Polymats is a Manufacturer of Floor Mats. The mats are made up by interweaving the straws manufactured from extrusion of PP Granules. These mats are popularly known as Polypropylene Mats (PP Mats) herein after referred to as the mats . An alternate term used for the concerned product is Plastic Satranj . 2. Manufacturing Process can be briefly explained as under: 1) Primary forms (PP Granules) is the basic raw Material used which may be either Virgin or made up from the Waste Plastic (Flakes). 2) These forms are put up in mixers for giving them desired Colour. 3) The Coloured Granules are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are 4601; 9. About the Chapter 46: (1) which states that for the purposes of heading 4601, the expression plaiting materials, plaits and similar products of plaiting materials, bound together in parallel strands means plaiting materials plaits and similar products of plaiting materials, placed side by side and bound together, in the forms of sheets, whether or not the binding materials are of spun textile materials which perfectly creates the picture of Plaiting Material being straws made from the above mentioned process of extrusion and then bound together in parallel/ perpendicular strands to form the Mats. (2). It specifically excludes (a) wall coverings of heading 4814; (b) twine, cordage, ropes or cables, plaited or not (heading 5607); (C) footwear or headgear or parts thereof of Chapter 64 or 65; (d) vehicles or bodies for vehicles of basketware (Chapter 87); or (e) articles of Chapter 94 (for example, furniture, lamps and lighting fittings). 3. Thus the Mats appropriately complies with the Chapter Heading 4601 expression and the above five exclusions nowhere considers the Mats. The tariff Item 4601 99 00 Other excludes from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y like to submit as under. 1. As per the Chapter 46 of first schedule of Customs tariff Act 1975, the definition: heading , in respect of goods, means a description in list of tariff provisions accompanied by a four-digit number and includes all sub-headings of tariff items, the first four-digits of which are 4601. For the Chapter 46 the expression plaiting materials means materials in a state or form suitable for plaiting, interlacing or similar processes; it includes straw, osier or willow, bamboos, rattan, rushes, reeds, strips of wood, strips of other vegetable material (for example, strips of bark, narrow leaves and raffia or other strips obtained from broad leaves), unspun natural textile fibres, monofilament and strip and the like of plastics and strips of paper. For the purpose of heading 4601 The expression plaiting materials, plaits and similar products of plaiting materials, bound together in parallel strands means plaiting materials, plaits and similar products of plaiting materials, placed side by side and bound together, in the form of sheets, whether or not the binding materials are of spun textile materials which perfectly creates the picture o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he like of plastic. It is also seen the description of Heading No. 46.01 Of the HSN that it covers mat/mating /screens of all plaiting materials and in the HSN Chapter Note 1 of Chapter 46 also, Plaiting materials includes monofilaments and strips and the like of plastics . In the HSN Notes below Heading No. 46.01, mats and matting (whether rectangular or in other shapes) made by weaving or binding parallel strands of plaiting material, twine, cord etc. are mentioned as goods falling within the scope of Heading No. 46.01 of the HSN. 4. In view of the above, it is clarified that plastic mat/matting (Satranji) would be appropriately classified under Heading No. 46.01 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). 3. It was also stated at the last of aforementioned circular that All the pending assessments may be finalized on the basis of above guidelines . Thus Honourable CESTAT (Customs, Excise and Gold Tribunal - Delhi) in Supreme Industries Ltd. VS Commissioner of Central Excise-2004-(170) ELT 432 = 2004 (5) TMI 378 - CESTAT, NEW DELHI upheld the Classification of the Mats under the Chapter Heading 4601 not only from the date of aforemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assification of Polypropylene Mats under the HSN 4601.KindIy do the needful. Thanking You. 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- It is submitted that, Issue on which advance ruling is required : M/s. Shradha poly mats having GSTN NO-27AASFS7874A1ZO is engaged in manufacturing of polypropylene mats (popularly known as pp mats) Herein after referred as the pp mats. 1. Manufacturing process of polypropylene mats - Polypropylene granules in primary forms is the basic raw Material used for p.p. mats which may be either virgin or made up from the waste plastic Compounding - Polypropylene granules are mixed using a high speed mixer along with certain adhesives pigments and master batches are added to form the desired color shade. Extrusion - The compound is added in extruders to form tubes of various length. Knitting - The tubes are knitted or weaved with the help of P.P. thread to form mats of various length. The weaving Pattern can be a 2/2 will Structure or 3/1 Structure. Finishing/ Testing - The Finishing and quality Control department ensures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lel stands or woven, on sheet form, whether or not being finished articles ( for example, mats matting screens) of vegetables materials such as of Bamboo, of rattan, of Other Vegetables materials. 6% 198A 4601, 4602 Grass, leaf or reed or fiber product, including mats, pouches, wallets. 2.5% Further this ambiguity is cleared by the CBIC vide notification no-21/2018 of Central Tax (Rate) dated-26/07/2018, the Said entry no-103 is revised. The new tax rate for the Chapter Heading 4601/4602 is at the rate of 2.5% for CGST respectively. Opinion by the nodal officer on the question raised for advance ruling is as following. 1. Whether 4601 as the HSN Classification of polypropylene is correct? Opinion - The HSN Classification Of polypropylene Mats is 4601. 2. If the answer to above question is affirmative, whether entry No. 198A (inserted vide Notification No 27/2017) is to be applied or Entry no 103 should be considered. In other words whether CGST /SGST Tax Rate us to be considered as 2.5% or 6% respectively? Opinion - Now as per central notification vide no-21/2018 of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification No.24/ 2018-Central Tax (Rate) dated 31st December, 2018 (iii) S. No. 198A shall be re-numbered as S. No. 198AA, and before S. No. 198AA as so re-numbered, the following serial number and entries shall be inserted, namely: 198A 4501 Natural cork, raw or simply prepared ; Schedule II 6% Entry No. 103 Sr. No. Chapter / Heading /Sub heading / Tariff item Description of Goods CGST Rate 103 4601 Plaits and similar products of plaiting materials, whether or not assembled into strips, plaiting materials, plaints and similar product Of painting materials, bound together in parallel stands or woven, on sheet form, whether or not being finished articles (for example, mats matting screens) of vegetables materials such as of Bamboo, of rattan, of Other Vegetables materials. 6% The main question in this application is the appropriate classification of poly propylene mat, and applicability of the notification issued under the provisions of GST for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g or similar processes. (2) Unspun natural textile fibres. (3) Monofilament and strip and the like of plastics of Chapter 39 (but not monofilament of which no cross-sectional dimension exceeds 1 mm nor strip or the like of an apparent width not exceeding 5 mm, of man-made textile materials, of Chapter 54 ). (4) Strips of paper (including paper covered with plastics). (5) Certain materials consisting of a textile core (unspun fibres, braid, etc.), wound or covered with strips of plastics. or thickly coated with plastics, so that the product no longer has the character of the fibres, braid, etc., forming the core. Certain of these materials, particularly the vegetable products, may be prepared (e.g., by splitting, drawing, peeling, etc., or by impregnating with wax, glycerol, etc.) to render them more suitable for plaiting, Interlacing or similar processes. For the purposes this Chapter, the following are not considered to be plaiting materials and articles or products made therefrom) are excluded from the Chapter : (i) Horsehair (heading 05.11 or Section XI). (ii) Monofilament of which no cross-sectional dimension exceeds 1 mm, or st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This group covers (1) Plaits . These consist of strands of plaiting material, without warp or weft, interlaced either by hand or machine in a general longitudinal direction. By varying the nature, colour, thickness and number of strands, and the manner of Interlacing, different decorative may be obtained. Plaits of this kind may be joined side by side and assembled into wider strips by sewing, etc. (2) Products similar to plaits in the sense that they have the same or similar uses, and that, though they are made by a process other than plaiting, they are also formed in longitudinal thong-like forms, strips, etc., from plaiting materials. They include : (a) Products made from two or more strands by twisting together, joining together or otherwise assembling (other than decorative motifs of heading 46.02. (b) Products (e.g., those known in trade as China cord ) consisting of a kind of cord made from non-crushed vegetable materials assembled simply by twisting. The above goods are mainly used in millinery, but are also used for the manufacture of certain furniture, shoes, mats, baskets or other receptacles. The goods of this heading may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Screens or panels such as those of willow or osier; building panels of plaiting materials or of plaits or similar products of plaiting materials straw, reeds, etc. laid parallel, compressed and bound together at regular intervals with base metal wire. These building panels or slabs may be covered on all surfaces and edges with kraft paperboard. The heading excludes mats and matting of coir or sisal fibre or the like with a base of cordage or of woven textile fabric (Chapter 57). 46.02 - Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from goods of heading 46.01 ; articles bf loofah. - Of vegetable materials : 4602.11 - - Of bamboo 4602.12 - - Of rattan 4602.19 - - Other 4602.90 - Other Subject to the exclusions specified in the General Explanatory Note to this Chapter, the heading covers : (i) articles made directly to shape from plaiting materials; (ii) articles made up from the already assembled products of heading 46.01, i.e., from plaits or similar products, or from the products bound together in parallel strands or woven in sheet form. The head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression Plaiting materials including strips and the likes of plastics as per Chapter Note 1 of chapter 46 and the terms of heading 4601 that covers plaiting materials bound together in parallel strands or woven in sheet form as finished articles (for example, mats, mattings, screens) . In the instant case we find that the extruded fine plastic tubes are woven into sheet forms and finished into articles as mats and hence covered in heading 4601. We further find from the note to heading 4602 that the mats being products of plaiting materials, which have acquired the character of finished articles by reason of being bound together in parallel strands or woven in sheet form, are excluded from the scope of heading 4602. Hence the items in question do not go beyond the heading 4601. We further find that the CESTAT (Customs, Excise and Gold Tribunal - Delhi) in the case of Supreme Industries Ltd. VS Commissioner of Central Excise-2004-(170) ELT 432 DT. 27 May 2004 = 2004 (5) TMI 378 - CESTAT, NEW DELHI has upheld the Classification of the product called Plastic Satranj (i.e. Mats) under the Chapter Heading 4601. We also find that, Circular No. 4/2018 dated 24.01.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding the above mentioned discrepancy, in pursuance of Note 1 to Chapter 46, the General Note 3 Of the Explanatory Notes of Chapter 46, and the terms of heading 4601, we come to the finding that the heading appropriate for Polypropylene Mats made from plaiting materials is 4601 and the relevant sub-heading is 4601 99. However as it is not necessary to go beyond four digit level for the purpose of this Advance Ruling, we hold that the product of manufactured by the applicant falls in heading 4601 of First Schedule of the Indian Customs Tariff Act,1975. 05. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under section 98 Of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-74/2018-19/B-169 Mumbai, dt. 27/12/2018 For reasons as discussed in the body of the order, the questions are answered thus - Question: - 1. Whether 4601 as the HSN Classification of Polypropylene Mats is correct? Answer : - Answered in the affirmative. Question: - 2. If the answer to above question is affirmative, whether entry No. 198A (inserted vide Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X
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