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TMI Blog2021 (7) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter 57 and if it is found to be made up of plastics covered under Chapter 39 (section VII), the same shall be covered under Tariff Item 3918 - the impugned product under discussion has non-woven material made up of PVC on surface, which is coated/laminated with plastics (PVC), which is not in dispute. Hence, by virtue of said Section 1(h) to Section XI (Textiles and Textile articles), same gets excluded from the scope of being Textile Textile articles under Section XI i.e. Chapters 50-63. There are no identifiable fibres, filaments or yarns in the exposed surface of their product but the web like structure made from 100% PVC, duly laminated/coated with PVC o the bottom. Therefore, the impugned goods do not qualify as textile materials as specified in Not 1 to Chapter 57 - the said Bill of Entry is of no help to the appellant - In the instant case, there is no fabric, woven or non-woven and no textile yarns. There is one PVC web obtained by moulding process which is then impregnated with PVC which acts as its base. Therefore, even in absence of relevant details about the product covered under the cited Bill of Entry, the goods in question cannot be claimed to be similar to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are undertaken in two stages. The process at Stage-I being production of man made monofilament for non-woven carpet top texture, the regular quality carpets mats generally have the following raw material in its compound: the plasticizer provides flexibility in the compound has a share of 26%, filler like CaCo3 or limestone powder from the mineral mines share 37%, additives and lubricants such as stearic acid, wax share 1% and suspension grade polyvinyl chloride 36%. The process at Stage-II being bonding of non-woven carpet top texture and backing coating the backing coating and adhesive are made from emulsion grade polyvinyl chloride 35%, plasticizer, additives, lubricants and fillers consisting 65%, the indications of the quantity of raw material is for a general type carpets and mats. 5. Further that, Under stage I, monofilament yarn with decitex around 270 and filament diameter range 0.38 to 0.75 mm is extruded through a perforated die plate using T-die extrusion. Extrusion is done through 3 to 4 parallel rows along the entire width of T-die and the vertically extruded mono filament in multiples immediately falls in between the grooved rollers in a water bed to form a non-wov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on supply of goods, the description of which is specified in the corresponding entry in column (3) of the Schedules under the Notification, falling under the tariff item, sub-heading, heading or chapter, as the case may be, as specified in the corresponding entry in column (2) of the said schedules. 11. Further, explanation (iii) to Notification No. 1/2017-IGST (Rate) provides that "Tariff Item", "sub-heading", "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975. Further, Explanation (iv) provides that the rules for the interpretation of the First Schedule to the Customs Tariff Act, 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. 12. It is submitted that the product proposed to be supplied will be covered under Tariff Heading 57 of the Customs Tariff Act, 1975, which deals with Carpets and other textile floor coverings. 13. The relevant entries of the Schedules covered there under have been submitted as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tile material and accordingly, it would be classifiable under Chapter 75. The mats are made up of 'textile fibre', could be established through the Explanatory Note to Chapter Heading 5603, which states that 'fibre may be of natural or man-made origin. They may be staple fibres (natural or made-made) or man-made filaments or be formed in situ'. As per HSN explanatory Notes to Chapter 55. 'Man-made fibres are usually manufactured by extrusion through spinnerets (jets) having a large number of hotels (sometimes several thousand); the filaments from a large number of spinnerets (jets) are then collected together in the form of a tow. This tow may be stretched and then cut into short lengths, either immediately or after having undergone various processes (washing, bleaching, dyeing, etc.) while in the tow form. The length into which the fibres are cut is usually between 25mm and 180 mm and varies according to the particular man-made fibre concerned, the type of yarn to be manufactured and the nature of any other textile fibres with which they are to be mixed.' Placing reliance on the above it is submitted that man-made fibres are usually manufactured by extrusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any coase fabric or felt padding between the floor and carpet, not dies it use linoleum coating over its textile backing. Therefore, the goods may be classified under Chapter Heading 5705, and to be more specific under Tariff Item 5705 00 49. 20.On the other hand, Chapter 39 does not cover 'goods of Section XI (textiles and texile articles) as per clause (p) of Note 2. In as much as the 'PVC carpet mats' supplied by the Applicant is appropriately classifiable as a textile product under HSN Chapter 57.05 explained in Explanatory Note Sl. No. 2 "non woven carpets, consisting of a layer of carded textile fibres crimped between grooved rollers to form loops, which may either be held in position by a thick coating of rubber, plastics, etc., which also serves as a backing or be bonded to a packing fabric by similar adhesives"; the impugned product is a non-woven carpet, which is coated by a thick coating of plastic, coating of non-woven by plastic is an appropriate process in production of commodities of HSN 57.05, Refer Explanatory Notes, Sl. No. 2. It is the applicant's understanding that, woven, knitted or crocheted fabric, felts or non-woven, impregnated, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed below for ready reference. 22.1 "Since the goods admittedly fall under chapter 57 and consist of more than two or more textile materials, it has to be classified on the basis of that textile material which predominates by weight over any other single textile material. As in the goods in question jute admittedly predominates by weight over each other single textile material, the said carpet could only be classified as jute carpets and nothing else." 22.2 The Hon'ble Court also made a finding regarding classification on basis of description of the goods, the relevant portion of which is reproduced below : 23.3 "The classification thereafter has to be covered under one heading or sub-heading of chapter 57. The question of classification of such carpets under one or other heading or sub-heading of chapter 57 has to be decided on the basis of description of such heading/sub-heading read with the relevant section notes and chapter notes. This is also flows from Rule 1 of the "General Rules for the Interpretation of the said Schedule" and these Rules are part of the Central Excise Tariff Act, 1985". 23. It is submitted that the case laws cited herein clarify that the ambit of 'carp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereafter @ 18% in terms of Entry No. 104A of Schedule-III of Notification No. 43/2017-Inegrated Tax (rate) dated 14.11.2017. 25.2 We not that the application filed by the applicant before the Advance Ruling authority of Kerala State stands referred to this Appellate Authority in terms of Section 98(5) of CGST/SGST Act, 2017 for determination of the aforesaid issue, which could not be resolved at the lower level for difference in opinion between the two members. We also note that (a) The CGST authority is of the view that the impugned goods viz. PVC carpet mats are classifiable under Tariff Item 5705 00 49 and rate leviable to GST @ 12% as per Entry No. 146 of Schedule-II of Notification No. 1/2017-Integrated Tax (rate) dated 28.06.2017; (b) Whereas, the SGST Authority is of the view that the said impugned goods are classifiable under Tariff Item 3918 and are leviable to GST @ 28% as per Entry No. 43 of Schedule-IV of Notification No. 1/2017-Integrated Tax (rate) dated 28.06.2017 till 13.11.2017 and thereafter @ 18% in terms of Entry No. 104A of Schedule-III of Notification No. 43/2017-Integrated Tax (rate), dated 14.11.2017. 25.3 The facts of the case which are not disputed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with knitted or woven fabrics, nonwovens or felts Kg 3918.90.90 Other Kg 25.4.2. 5705 : The relevant entry no 146 of Schedule-II of Notification No. 1/2017 is reproduced below : 146. 5705 Other carpets and other textile floor coverings, whether or not made up; such as Mats and mattings including Bath Mats, where cotton predominates by weight of Handloom, Cotton Rugs of handloom The relevant extract of customs tariff is as follows: Tariff Item Description of goods Unit (1) (2) (3) 5705 Other carpets and other textile floor coverings, whether or not made up 5705.00 Other carpets and other textile floor coverings, whether or not made up Carpets 5705.00.11 Of silk m2 5705.00.19 Other m2 Durries 5705.00.21 Durries cotton m2 5705.00.22 Durries of man-made fibres m2 5705.00.23 Durries of wool m2 5705.00.24 Cotton durries of handloom (including Chindi Durries, Cotton Chenille Durries, Rag Rug Durrie, Printed Durries, Druggets) m2 5705.00.29 Other m2 Of jute 5705.00.31 Of blended jute m2 5705.00.32 Of coir jute m2 5705.00.33 Other m2 Carpets, carpeting, rugs, mats and mattings 5705.00.41 Knitted m2 5705.00.42 Mats and mattings includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s : "1. Throughout this Schedule, the expression "plastics" means those materials of headings 3901 to 3914 which are or have been capable, either at the moment of polymerization or at some subsequently stage, or being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence. Throughout this Schedule any reference to "plastics" also includes vulcanised fibre. The expression, however, does not apply to materials regarded as textile materials of Section XI. Further, as per clause (p) of Note 2 to Chapter 39, the goods of section XI (textiles or textile articles) i.e. Chapter 50 to 63 will not be covered under this chapter. The relevant extract of the same is reproduced as follows : This Chapter does not cover : (a) …… (b) …… (p) goods of Section XI (textiles and textile articles); (q) …… 25.9 Thus, on combined reading of note 1 and 2 of the chapter 39, the term plastic for the purpose of chapter 39 will not cover any material which is classified as textile mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ics (as defined in Note 1 to Chapter 59), felt or nonwovens, where the textile is present merely for reinforcing purposes." Plates, sheets and strips of cellular plastics combined with textile fabrics on both faces, whatever the nature of the fabric, are excluded from this chapter (generally heading 56.02, 56.03 or 59.03). 25.13 In this regard, Note 1(h) to Section XI, Note 3 to Chapter 56 and Note 2 to Chapter 59 relevant for deciding classification of a combination of textile and plastics materials are reproduced as below : ---------- Note 1(h) to Section XI reads : "1. This section does not cover : a) ………. h). Woven, knitted or crocheted fabrics, felt or non-wovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of Chapter 39: …………" "Note 9 to Chapter 39 reads : For the purposes of heading 39.18, the expression "wall or ceiling coverings of plastics" applies to products in rolls, of a width not less than 45cm, suitable for wall or ceiling decoration, consisting of plastics fixed permanently on a backing of any material other than paper, the layer of plastics (on the face side) being granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inations also, subject to certain conditions. Relevant factors to decide classification of subject goods rule out classification under Section XI (Textiles and Textile articles) whereas the inclusive provisions of Chapter 39 (more specifically Tariff Head 3918) very well cover impugned goods, as detailed above. 25.15 In this context it is seen that Chapter 57 of the HSN falls under Section XI of the Customs Tarff. Section Note 1(h) of Section XI, relied upon by the AAR excludes inter alia non-wovens impregnated/coated with plastics. In their written submissions, the appellant has claimed the said goods to be 'Non-woven' and impregnated/coated (as per their manufacturing process). Thus in view of Note 1(h0 of Section XI, the said goods are apparently excluded outright from this section. If the said goods are excluded from the Section XI, their classification under any Chapter under the Section would also be ruled out. 25.16 The Appellant, however, have placed their counter claim that their goods are in the nature of 'textiles', and are therefore excluded from Chapter 39 by virtue of Chapter Note 2(p) of the said Chapter. Thery have claimed that the exposed surface in their goods i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... structure made from 100% PVC, duly laminated/coated with PVC o the bottom. Therefore, the impugned goods do not qualify as textile materials as specified in Not 1 to Chapter 57. 25.18 As regards the Bill of Entry produced by the appellant for goods imported by other importers, wherein according to the applicant, it has been classified under customs tariff heading 5705 00 49, it is observed that the detail facts of the goods mentioned in the Billed Entry like test report etc. are not available and the nature and identity of goods are also not available on record to consider the same to be applicable to the goods in question before us. It is therefore difficult to arrive at a conclusion that the goods imported under the said Billed Entry are similar to that of the goods in question. Therefore, the said Bill of Entry is of no help to the appellant. In the instant case, there is no fabric, woven or non-woven and no textile yarns. There is one PVC web obtained by moulding process which is then impregnated with PVC which acts as its base. Therefore, even in absence of relevant details about the product covered under the cited Bill of Entry, the goods in question cannot be claimed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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