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TMI Blog2022 (3) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with other materials used for technical purposes are included in this Chapter, it is held that the goods Geomembrane, though coated with Plastic but used for technical purposes finds place in the Tariff 5911, for the dual reason that the phrase other materials used in this Tariff is vast to include plastics also; coupled with the technical use of Geomembrane - technical uses of Geomembrane, Geomembrane passing the test of Section note XI(1)(g) to Section XI, Geomembrane satisfying the test of Chapter 59 Note 7(1)(a) and by applying the Doctrine of Harmonious Construction, cleared the bar raised in Section note XI(1)(h) to Section XI; thus Geomembrane is a textile article. Classification of Tarpaulin - HELD THAT:- Tarpaulin is used for protecting various things and materials and also covering motor vehicles and the like; for packing and protecting the goods in transportation. Also in general, Tarpaulins are used to cover construction materials and equipment, athletic fields, vehicles or other exposed objects, etc. - the uses of Tarpaulin are general in nature and thereby there are no merit to employ functional concept classification based on technicality in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g purpose. By employing weft and warp method of weaving, woven fabrics are produced by using the tapes/strips of width below 5 mm. These are uncoated woven fabrics of plastic; and such fabrics in rolls are further processed for producing coated/laminated fabrics on extrusion lamination machine within M/s. Texel s factory. (c) Rolls of uncoated fabrics loaded on extrusion lamination machine are drawn for feeding into the laminating unit. Mix of Low Density Polythene (LDPE), LLDPE and colour/black master batch is fed into the extruder through a Hopper, and melted by applying heat and friction, for forming a thin film in a molten state. Uncoated fabric is thus coated/laminated on one side by this molten mix, and passed over a chill roll containing chilled water. Edges of coated/laminated fabrics are trimmed and then wound on steel pipes on a winder. (d) Same way, the other side of the fabric is also coated/laminated to form a waterproof fabric. For increasing thickness of such fabric, one side coated/laminated fabrics are sandwiched laminated with a film and then laminated again with one more layer of fabric to form a coated/laminated fabric of higher thickness. Trimming of edge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sealing to increase width of the fabrics and cutting in length to get the required size, the finishing process for Tarpaulin involves hemming of size and ends with rope to give required strength to the product and for preventing tearing from the edges. Such hemmed fabric is punched with aluminium or brass or plastic eyelets to produce the final products like Tarpaulin. Eyelets are required so that the user could tie tarpaulin easily without tearing. Such fully finished tarpaulin is packed for sale and supply. 4.2 M/s. Texel submit that in Mc-Graw-Hill Dictionary of Scientific and Technical Terms, Tarpaulin is described as a sheet of waterproof canvas or other material; used to cover and protect construction materials and equipment, athletic fields, vehicles or other exposed objects. Tarpaulins produced are specially reinforced High Density Polythene Scrim fabric, which account for their rugged, tear resistant strength. Since they are waterproof, UV stabilized, fungus, chemical and crack resistant and light weight, they are used for protecting various things and materials and also for covering motor vehicles and the like. 5. Texel has further submits that Heading 5911 of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defined or clarified thereunder. iv Since Heading 5911, Sub Heading 59111000, is for Textile products and articles, and Textile fabrics coated, covered or laminated and used for technical purposes, it would be relevant to find out what is Textile products and articles and Textile fabrics . 7. M/s Texel submits as follows: i. The Hon ble Supreme Court in case of Porritts Spencer (Asia) Ltd. 1983 (13) ELT 1607 (SC) has held that the word textiles was derived from the Latin texere which meant to weave , and it meant any woven fabrics. It is further held that when yarn of any material and description was woven into fabrics, what came out into being was a textile and it was known as such. Phenomenal advancement in science and technology resulting in a large variety of fabrics manufactured from materials till then unknown or un-thought of and new techniques invented for making fabric out of yarn have also been taken into consideration by the Hon ble Supreme Court while laying down the law that any woven fabrics were textiles irrespective of the materials used, technique of weaving adopted and the end-use of the product. ii Further, Hon ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, Fabrics etc. In the judgement rendered on 24.12.2020, the Hon ble Gujarat High Court has considered a dispute of classification of two products, namely, Geo-grid and Agro Shed Net. The Revenue s stand that these goods were articles of plastic because they were made of HDPE tapes and also the Revenue s reliance on judgement of the Hon ble Madhya Pradesh High Court in case of Raj Packwell Ltd. 1990 (50) ELT 201 (M.P) have not been accepted by the Hon ble Gujarat High Court; and it is also held that Raj Packwell Ltd. was not a case where classification of fabric of plastic was considered; M/s Texel submits that the jurisdictional High Court, has in terms held that the judgement of the Hon ble Supreme Court was an answer to what was the Revenue argued about what was textile, and whether woven fabric of plastic material was a textile product or not (para 55 of the judgement); that plastic was used for producing textile fabrics, and raw material for various fabrics was plastic (para 53 of the judgement); that the judgement in Raj Packwell Ltd. had nothing to do with HDPE fabric; and that woven fabric would be textile irrespective of the method of weaving through any technique and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r proofing of Ponds and lining of fields for agricultural applications in case of Geomembrane, and for packing and protecting the goods in transportation etc. in case of Tarpaulin. Waterproofing application is undoubtedly a technical purpose or a technical use. Packing is also a technical purpose or a technical use, and packing is also referred to at Note-7(a)(vi) of Chapter 59. It is submitted that considering this position, the Authority for Advance Ruling under GST for Daman, Diu and D NH has decided in cases of Emmbi Industries Ltd. 2019 (29) GSTL 105 (AAR-GST) that Geomembrane for waterproof lining and used as pond liner laminated textiles were classifiable under Heading 5911. 15. Texel submits that any contrary decision based on judgement in case of Raj Packwell Ltd. (supra) and without considering the law of the land laid down by the Hon ble Supreme Court in case of Porritts Spencer (Asia) Ltd., and also the judgement of the jurisdictional High Court in case of CTM Technical Textiles Ltd. is in the nature of per incuriam; and hence not requiring any consideration being contrary to the binding judgements of the Hon ble Supreme Court and the Hon ble High Court. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by subjecting textile fabrics to further operations and processes on the other hand. 17.1 Further submits that Heading 5911 specifically refers to Textile products and articles, for technical uses, specified in Note-7 to this Chapter. The broad description of the goods therein makes it clear that the goods classified under Heading 5911 of the Tariff are not textile fabrics, that is to say, products brought into existence by mere weaving; but the goods classified thereunder are textile products and articles, which are produced upon subjecting textile fabrics to further operations or processes. Such textile products and articles cease to be textile fabrics for the purpose of classification under Chapter 59 of the Tariff. 18. Texel submits that the terms products and articles are not defined under the Tariff. Dictionary meaning of the term Product is an article or substance that is manufactured or refined for sale. The term article in Dictionary is explained as a particular item or object, typically one of a specified type. In Collector C.Excise V/s. Protein Products of India 1988 (38) ELT 749 (SC), the Hon ble Supreme Court has observed that the word product was defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnical uses. But in Note-7 also, a few products and article are specifically referred to under Clause (a), whereas Textile articles of a kind used for technical purposes are separately referred to under Clause (b), while giving a few examples of such textile articles. Texel submits that various types of goods like Bolting cloth, Straining cloth of a kind used in oil presses etc. are referred to under Clause (a) of Note-7, signifying that such fabrics or cloth cease to be textile fabrics for the purpose of classification under Heading 5911 of the Tariff, and such products are considered to be textile products because they are meant for technical uses. Under Clause (b) of this Note also, products like textile fabrics and felts are referred to, again signifying that a product ceases to be textile fabrics for the purpose of classification under Heading 5911 when it is obtained by subjecting textile fabrics to further operation/s and process/es. It is submitted by Texel that under Heading 5911 of Harmonious System of Nomenclature, it is explained that the expression Textile articles of a kind used for technical purposes are any of the fabrics which have been made up and also textile fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 59111000, because such textile products and articles are used for technical purposes. 26. Texel vide letter Nil dated received on 1-10-21submittedas follows: i. Ministry of Textile vide Not. No. 12015/03/2020-IT dated 24-9-21 implemented a production linked incentives scheme for textiles in order to provide incentives to the textiles manufacturer. In Annexure-III to the Notification, at Sr. No. 1, Geo Textiles including Geomembranes are listed under the category of technical textile products. ii. The Ministry of Textiles has classified Geomembranes under HSN 54071099 in as much as these are technical textiles products of Chapter 54. iii The product manufactured by M/s. Texel is a coated form of Geomembranes and hence such coated technical textiles are classifiable under Heading 5911. iv In view of the decision of the Hon ble Supreme Court of India reported at 1983 (13) ELT 1607, the decision of Hon ble Gujarat High Court in the case of M/s. CTM Technical Textiles Ltd. and the Notification issued by the Ministry of Textiles classifying these goods under technical textiles, proves it beyond doubt that Geomembranes and woven tarpaulin manufactured by M/s. Texe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , CA and Shri Anuj Sharedalal, CA and they reiterated the submission. Shri Pratik Trivedi reiterated the case laws submitted in the written submission of H ble Gujarat High Court case law of M/s. CTM Textiles and decision of H ble Apex Court in Porritts and Spencer. It was further submitted that the decision of Raj Packwell is not applicable to the present case. Findings 31. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 32. We have carefully considered all the submissions made by M/s Texel and the Revenue. 33. M/s Texel is before us for Classification of Geomembrane and Tarpaulin. M/s Texel opines HSN 59111000/59119090 for said goods. Further M/s Texel cites a Notification dated 24-9-21 issued by Ministry of textiles, wherein Geomembrane described as woven fabrics obtained from high tenacity yarn of nylon or other polyamides or of polyesters: other: other [found mentioned in Annexure-III] indic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y that is primarily responsible for policy in question, should prevail. By applying the same ratio, we find it in compliance to judicial discipline and in consonance to the laid ratio decidendi as cited, that in matters of GST Classification, we comply with the General Rules of Interpretation for GST Classification and GST Scheme of Law. Further reference to HSN explanatory Notes has persuasive value. What we intend to express is that GST Scheme of law shall be given precedence and compliance for Classification. 39. Classification of Geomembrane: i. In this regard, We note that the Strips made from HDPE granules, have width less than 5 mm and are then weaved. Thus Section note 1(g) to Section XI- Textile and Textile Articles has been complied with. ii. The phrase for technical use is mentioned in the Chapter Notes to HSN 5911. Description of Goods in Subheading 5911 reads as follows: 5911 - Textile products and articles, for technical uses, specified in Note 7 to this Chapter; such as Textile fabrics, felt and felt-lined woven fabrics, coated, covered or laminated with rubber, leather or other material of a kind used for card clothing, and similar fabri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this Chapter, we hold that the goods Geomembrane, though coated with Plastic but used for technical purposes finds place in the Tariff 5911, for the dual reason that the phrase other materials used in this Tariff is vast to include plastics also; coupled with the technical use of Geomembrane. 39.3. Thus, in light of the following: technical uses of Geomembrane, Geomembrane passing the test of Section note XI(1)(g) to Section XI, Geomembrane satisfying the test of Chapter 59 Note 7(1)(a) and by applying the Doctrine of Harmonious Construction, cleared the bar raised in Section note XI(1)(h) to Section XI; We are of the view that Geomembrane is a textile article. We find that our view that Geomembrane is a textile article is in compliance to the H ble Apex Court view held in Porritts Spencer (Asia) Ltd. 1983 (13) ELT 1607 (SC). Classification of Tarpaulin 40. M/s. Texel and Revenue opines Tarpaulin s HSN at 5911. 41. On reading the HSN tariff, we find that there is mention of tarpaulin in two Tariff sub heading, namely: i. HSN 3926: Plastic Tarpaulin (reference to Sr No 111 to Notification 1/2017-CT (R) dated 28-6-2017) ii. HSN 6306: Tarpaulin ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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