9911796707
TMI Blog2019 (10) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacturing of various products which are used in packaging process and in agro based water conservation. The applicants have been carrying out activity of manufacturing various types of packaging material falling under Headings 6305, 3923 and 3926 and the description of the said goods are as under; Sr. No. Item Description HSN Code. 1. Flexible Intermediate Bulk Containers i.e. FIBC Bags 6305 32 00 2. PP Woven Bags/HDPE Woven Bags 6305 33 00 3. PP Stitching Yarn 6305 90 00 4. HDPE/LDPE/LLDPE/PP Extruded &/or Co- extruded Plastic Film Rolls. 3920 10 12/ 3920 10 92/ 3920 20 20 5. HDPE/LDPE/LLDPE Poly Bags. 3923 21 00/ 3923 29 90 2.2 In addition to the above, the applicant is also manufacturing and supplying products for water conservation and other water preserving products which are predominantly used for agricultural sector. The applicant is a leading manufacturer of the products namely "Geo Membrane for Water Proof Lining-Type-ll as per IS:15351:2015" which is used for Water Proof Lining of Ponds. Canals and Other Water storage places. The said products are also referred as Pond Liners and are specific Laminated High Density Polyethyle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the tapes to achieve the required tape width and desired strength. Width of the tape/ strip is between (2.1 mm to 3.7 mm.) and the Linear Density of the tape/ strip is 1900 - 2100 Denier. Tapes/ strips are wound on bobbins for further processing. Fabric Weaving : HDPE woven fabrics are manufactured on circular looms. As per design of woven fabric creels & shuttle of loom is loaded with bobbins. As per requirement of fabric adjust the size of ring and mesh. These tapes are then passed through circular ring on horizontal & vertical direction. Set the all parameter as per geomembrane fabric standard. Liner Film Extrusion : Film is manufactured from Polyethylene (PE) granules and required suitable UV stabilizer is added. Granules are then extruded through circular die to produce blowing film which further uniformly passed through take up roller to get the required film width & micron. Tubular film is made on surface winder & it flatten with help of guide roller. Lamination Coating : The HDPE woven fabric is laminated on both sides with LDPE with suitable combination of LLDPE. The coating film is UV stabilized by incorporating 2.5 +/- 0.5 per cent of carbon black with unif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing, they clarified as under; (A) The first product which comes into existence is the "HDPE Tapes Less Than 5 mm In Width" and it is the claim of the applicant that the same are covered under HSN 5404 90 20. In support of the said classification, they referred the following : (i) Chapter Note 2(p) to Chapter 39 of HSN/GST Tariff visualizes exclusion of "Goods of Section-XI (Textile & Textile Articles)" from the scope of the Chapter 39. (ii) Section XI covers Textile & Textile Articles and Section Note 1 (g) excludes only strips of plastic where the width is exceeding 5 mm. The said wording read as under : "1. This Section does not cover : (a)...................... (g) 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)". From the above Section Note 1(g) to Section XI, it would be observed that Plastics Strips of width less than 5 mm shall be covered under Section XI which covers Chapter 50 to Chapter 63 of HSN. (iii) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding Woven Fabrics obtained from materials of Heading 5404". * "5407 20 - Woven Fabrics obtained from strip or the like" The said Heading and sub-heading clearly visualizes that the Woven Fabricsfrom HDPE Strips and Tapes of less than 5 mm of Heading 5404 shall be covered under Heading 5407 20 of the HSN. (C) The above Woven Fabrics covered under Heading 5407 20 is subjected to sandwich lamination of plastics as explained above and brings into existence Geomembrane pond lining fabrics which is a textile fabrics of a kind used for technical purposes. The said Industrial Technical Fabrics are supplied in piece form or are in cut to length as per the specification of the customer and supplied in pieces and are covered under Heading 5911, for which they refer to the following : (i) Chapter Note 7 to Chapter 59 of Tariff/HSN visualizes the scope of Textile Fabrics covered under Heading 5911 for technical purposes as under : "7. Heading 5911 applies to the following goods, which do not fall in any other headings of Section XI : (a) Textile products in the piece, cut to length or simply cut to rectangular (including square) shape (other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ", are made from HDPE Tapes/ Strips of less than 5 mm which are specifically covered under Heading 5404 as Synthetic Textile Material and the specially woven fabrics from the said HDPE Tapes/ Strips are covered under Heading 5407 20. 3.3.1 The applicant submitted that it is the said HDPE Woven Fabrics which is referred as Woven Fabrics made from Synthetic Textile Material which is subjected to LDPE Coating and Lamination referred as Sandwich Lamination. After the said process two or more pieces of said Sandwiched Laminated Geomembrane fabrics are joined/ seamed together by a suitable heat air blower sealing process keeping into the requirement of the customer based on which the said fabrics are cut and joint and cut sealed as per standard sealing process to be used as pond liner. The said Laminated Coated Fabrics is used for technical purpose and is specifically covered under scope of Heading 5911 10 00 as enumerated above. 3.4 They submitted that the said product cannot be covered under Chapter 39 as it is specifically made from Textile Material as per the scope of Heading 5404 and Woven into Fabrics of 5407 and the specially coated and laminated fabrics duly fabricated by Heat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submit that on perusal of various sub-headings and elements covered under the Heading 3926 dearly illustrates that the "Laminated High Density Poly Ethylene HDPE Woven Geomembranefor water proof lining - IS:15351:2015", would not be covered under any of the sub-heading under 3926. 3.7 In addition to the above submissions, the applicants wish to refer and rely on the following Notifications and Circulars which substantiate that the relevant Government authorities also considered the said product i.e. "Laminated High Density Poly Ethylene HDPE Woven Geomembrane for water proof lining IS:15351:2015", as Textile Fabrics for technical purposes and technical uses and is considered as a part of Textile Industry and not as a part of Plastic Industry. The applicants wish to refer and rely on; (a) Notfn. No. 54/2015-2020, dated 15-1-2019 issued by the Directorate General of Foreign Trade, Department of Commerce, Ministry of Commerce and Industry, GOI, as per the power conferred under sec. 5 of F.T. (D & R) Act, 1992 read with Paras 1.02 and 2.01 of FTP, 2015-2020, wherein they had incorporated list of 207 items as technical textiles. The said Notification covers the above referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oven Bags and Sacks. Similarly in Rajasthan Synthetic Industries Ltd., before Rajasthan High Court, the products were HDPE/PP tapes and HDPE/PP Woven Sacks respectively. None of the said High Courts had an opportunity to evaluate the classification under Heading 5911 for Textile Fabrics duly laminated and coated with plastics for technical purpose and technical uses as enumerated above. Accordingly the said High Court decisions cannot be applied to the facts of the case. 3.11 Without prejudice to the above, the applicant further submitted that the period before both the Hon'ble High Courts were 1988-89 & 1989-90, wherein the scope of Chapter 54 was different as compared to the scope of Chapter 54 under HSN and GST. 3.12 During the period before the Hon'ble High Court i.e. 1988-89 and 1989-90, Chapter 54 was covering only "Manmade Filament" and there was no provisions for covering strips of width less than 5 mm under Heading 54.04. The said Heading 54.04 read as : "54.04 - Artificial Filament Yarn and sewing thread, including artificial mono-filament of less than 60 denier, not texture". 3.12.1 However, under HSN and the GST Tariff as on now, the Chapter 54 covers "Manm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r personal hearing before us. He submitted sample of the product manufactured by them alongwith supporting literature. Further he argued that the raw material used for the product is LDPE and its further process is to convert into tape to fabrics which is later on laminated. In the market their product is used for lining of Pond and water bodies. They further contested that their product is laminated fabrics, hence, falls under Ch. 59 instead of 39 of GST Tariff and requested that their application may be decided accordingly. 5. Discussion and Findings : 5.1 In the present case we have to decide the correct classification of the material goods in question i.e. "Laminated High Density Poly Ethylene HDPE Woven Geomembrane for water proof Lining Type-Il, IS:15351:2015", as to whether is classifiable under HSN Code 5911 10 00 or as Article of Plastics under HSN Code 3926 90 99. The applicant have paid required fee vide Challan Number CIN 19052600006524, dated 30-5-2019 for seeking of Advance Ruling for the said product. Now, we the members of Advance Ruling, have to decide as to whether the goods "Laminated High Density Poly Ethylene HDPE Woven Geomembrane for water proof Linin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h take up roller to get the required film width & micron. Tubular Film is made on surface winder & it flatten with help of guide roller. 5.2.4 Fourth stage of manufacturing of the product in question is Lamination Coating. The HDPE woven fabric is laminated on both sides with LDPE with suitable combination of LLDPE. The coating film is UV stabilized by incorporating 2.5 +/- 0.5 percent of carbon black with uniform dispersion. HDPE woven fabric is bonded with single side LDPE coating. Similarly other side of the fabric is bonded together by sandwich lamination. For sandwich lamination, HDPE woven fabric is bonded with LDPE coating and LDPE liner film. The roll is ready for sealing process. 5.2.5 The final stage of the product in question is Sealing. The two or more pieces of geomembrane fabrics are used, the geomembrane are joined/ sealed together by a suitable heat air blower sealing process keeping an overlap as per standard sealing process. 5.3 In view of the above we the members of Advance Ruling find that the main product around which the whole process of manufacturing revolves is HDPE Woven Fabrics. 5.4 The applicant contended that the product in question is known as Agro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olymerization or at some subsequent stage, of being formed under external influence (usually heat and pressure; if necessary with a solvent or plasticizer) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence. Throughout the schedule any reference to "plastics" also includes vulcanized fibre. The expression, however, does not apply to materials regarded as textile material of Section XI". 6.2 On perusal of the above Chapter Note 1 to Chapter-39, it is amply clear that the textile materials of Section XI are excluded from the scope and terms of plastics for the said chapter and the HDPE Tapes and Fabrics are covered under Section XI and they are out of the scope of Chapter 39 and accordingly the same cannot be covered under the scope of Heading 3926 of the HSN. 7. Now we discuss the flow of classification for the above products which are arising during the course of manufacturing. The first product which comes into existence is the "HDPE Tapes Less Then 5 mm In Width" and no doubt the same are covered under HSN 5404 90 20. As Section XI covers Textile & Textile Articles and Section Note 1 (g) exclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmonly used in other machines, Cotton fabrics and articles used in machinery and plant, Jute fabrics and articles used in machinery and plant, Textile fabrics of metalized yarn of a kind commonly used in paper making or other machinery, Straining cloth of a kind used in oil presses or the like, including that of human hair, Paper maker's felt, woven, Gaskets, washers, polishing discs and other machinery parts of textile articles" 5911 10 00 - Textile fabrics, felt and feltlined woven fabrics, coated, covered or laminated with rubber, leather or other material, of a kind used for card clothing, and similar fabrics of a kind used for other technical purposes, including narrow fabrics made of velvet impregnated with rubber, for covering weaving spindles (weaving beams)" 7.3 On perusal of the above , it is observed that the, "Laminated High Density Poly Ethylene HDPE Woven Geomembrane for water proof lining IS:15351:2015", are made from HDPE Tapes/ Strips of less than 5 mm which are specifically covered under Heading 5404 as Synthetic Textile Material and the specially woven fabrics from the said HDPE Tapes/Strips are covered under Heading 5407 20. It is the said HDPE Woven Fabr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. 325 (S.C.). 8.1 We further note that the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. According to Rule 3(a), a heading which provides the most specific description shall be preferred to heading providing a more general description. Collector v. Metrowood Engineering Works - 1989 (43) E.L.T. 660 (Tri.). When an article has by all standards, a reasonable claim to be classified under an enumerated item in the CET, it will be against the very principle to deny it the parentage and consign it to be an orphanage of the residuary clause - Dunlop India Ltd. v. UOI - 1983 (13) E.L.T. 1566 (S.C.) (b) Mixtures, composite goods consisting of different materials or made up of different components and goods put up in sets, which cannot be classified by reference to (a), shall be classified as if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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