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TMI Blog2022 (7) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... ne, by no stretch of imagination construed as textile but merits classification as plastic or article of plastic under Chapter Heading No. 3923. From perusal of findings of Supreme Court in PORRITTS SPENCER (ASIA) LTD. VERSUS STATE OF HARYANA [ 1978 (9) TMI 72 - SUPREME COURT] , it is very clear that the product in question in above case viz. dryer felts is made from cotton and wollen which is covered in the ambit of textile and in present case Non-woven bags are made from polypropylene which is a type of plastic and on this ground alone it can be said that the above case law relied by appellant is not applicable in present case. Thus, the product in question viz. Polypropylene Non-woven bags merits classification under Chapter Heading 3923 of the HSN/Customs Tariff Act, 1975. Appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ing vide ruling 02/WBAAAR/Appeal/2019 dated 13.05.2019 have settled the law that polypropylene non-woven bags are classifiable under Heading 6305.3300 and therefore would prevail over the clarification issued by TRU vide Circular No. 80/54/2018-GST wherein polypropylene non-woven bags are classified under Heading 3923 and attract 18% GST. The appellant also relied upon judgment of Supreme Court in case of Porritts and Spencers (Asia) Ltd V/s State of Haryana [1983 (13) ELT 1607 (S.C.)] wherein it was held that the word 'textile' would also cover the fabric manufactured through any material. 6. The Gujarat Authority for Advance Ruling (herein after referred to as 'the GAAR'), vide Advance Ruling No. GUJ/GAAR/R/84/2020 dated 17.09.2020, inter-alia observed that in view of Madhya Pradesh High Court Judgment in case of M/s Raj Packwell Ltd, fiber manufactured from polypropylene granules cannot be considered as textile in view of Textiles Committee Act, 1963 and hence classification of polypropylene non-woven bags under Heading 6305 is not correct. Further, the ruling of WBAAR relied upon by appellant is not applicable in provisions of Section 103 of CGST Act. GAAR also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhya Pradesh High Court in case of M/s Raj Pack Well Ltd as product under consideration before High Court was Woven Bags and therefore the said decision is not applicable in present case. The appellant further submitted that GAAR erred in following clarification issued by TRU, CBIC as the said clarification pertains to Non-woven bags laminated with BOPP and in Para 7.5 of said circular, it is specifically stated that non-laminated bags would merit classification as per their constituent materials. 7.4 The appellant submitted that GAAR ignored the fact that Director of DKTE Center of Excellence in Non Wovens clarified beyond doubt that polypropylene non-woven is textile material and not plastic and therefore, the product manufactured from such material could never be classified as plastic material. The appellant further submitted that GAAR ignored that the Supreme Court, on similar issue. in case of Porritts and Spencers (Asia) Limited V/s State of Haryana settled the law that the word 'textile' would also cover the fabric manufactured through any material. The appellant submitted that from finding of Supreme Court, it is clear that fabric can be manufactured from any mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8) ELT 683 (Tri-Chennai)], (v) Amit Cotton Industries [2019 (29) GSTL 200], (vi) Senthilkumar Thilagavathy [2019 (25) GSTL 145] and (vii) Claris Lifesciences Ltd Vs UOI [2014 (305) ELT 497 (Guj)] 9. During the course of personal hearing held on 31.05.2022, the advocate for the appellant reiterated the submissions made in the appeal dated 26.10.2020 and additional submissions made vide their letter dated 12.01.2022. The advocate for the appellant also submitted that they are manufacturing non-woven non-laminated bags and the same should be classified under 6305. That GAAR has given no findings on the Section Note of Chapter 39. That GAAR has not considered their manufacturing process. That the product manufactured by them will fall, as described, under Para 7.5 of Board's Circular No. 80/54/2018-GST dated 31.12.2018. FINDINGS : - 10. We have carefully gone through and considered the appeal and written submissions filed by the appellant, submissions made at the time of personal hearing, Advance Ruling given by the GAAR and other material available on record. 11. The main issue here is to decide the classification of the product viz. Poly Propylene Non-Woven Bags manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind used for sending samples of merchandise by post. The heading also includes such articles as tea sachets. Packing cloths which after use as bale wrapping are roughly or loosely stitched together at the edges, but which do not constitute finished or unfinished sacks bags, are excluded (heading 6307). 15. The GAAR held that Poly Propylene Non-Woven bag is classifiable under CTH 3923. The relevant chapter notes, tariff entry and HSN Explanatory note is given below: CHAPTER 39 Plastics and articles thereof NOTES: 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 polymerisation or at some subsequent stage, of 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. 2. This Chapter does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd GST rates on Polypropylene Woven and Non-Woven Bags and Polypropylene Woven and Non-Woven Bags laminated with BOPP. 7.2 As per the explanatory notes to the HSN to HS code 39.23, the heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products and includes boxes, crates, cases, sacks and bags. 7.3 Further as per the Chapter note to Chapter 39, the expression "plastics" means those materials of headings 39.01 to 39.14 which are or have been capable, either at the moment of polymerization 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. 7.4 Thus it is clarified that Polypropylene Woven and Non-Woven Bags and PP Woven and Non-Woven Bags laminated with BOPP would be classified as plastic bags under HS code 3923 and would attract 18% GST. 7.5 Non-laminated woven bags would be classified as per their constituting materials. (emphasis supplied) The GAAR also relied upon above circular in its ruling d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Authority for Advance Ruling) vide their order no. 02/WBAAAR/Appea1/2019 dated 13.05.2019, submitted and relied upon by the appellant in their appeal, in the case of M/s. U S Polytech has proceeded on the premise that the "P P Non-Woven bags manufactured by the applicant from non-woven fabric under HSN 5603 falls under HSN 63053300". Thus they have not considered the classification of Poly Propylene Non-Woven bags independently. 17.1 The WBAAAR in the above order had also held that "The WBAAR has pronounced its ruling mainly based on the Advance Ruling Order No. CT/5492/18-C-3 dated 29.05.2018 issued by the Kerala Authority of Advance Ruling on M/s. J J fabrics, Ernakulam. In the said case, the primary raw materials for polypropylene sheets are polypropylene granules which are further used for manufacture of Polypropylene non-woven bags. In the instant case the polypropylene non-woven bags are manufactured from the non-woven polypropylene fabrics. Hence, the WBAAR erred in holding that PP Non-Woven Bags, specifically made from non-woven polypropylene fabric are plastic goods to be classified under sub-heading 3923 29." The said findings do not help th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early says that the Board has decided that so long as the finished articles of plastic is made out of plastic material falling under Tariff Item No. 15A(i), even if at the intermediate stage articles classifiable under Item No. 15A(ii) if any tariff item emerges, the said product would be considered to have been produced out of the plastic material falling under Tariff Item No. 15A(i) and, therefore, the HDPE woven sacks should be considered as articles of plastic and that the Tribunal's decision be accepted. In common parlance also the HDPE woven sacks are known as plastic woven sacks industry as is apparent from the annexures filed with the petition and the authenticity of which has not been disputed. The Dy. Director of the Ministry of Textile, Office of Textile Commissioner has, vide letter dated 2-3-1989 informed one of the petitioners that the HDPE/PP weaving activity on regular looms as well as circular looms manufacturing fall under the purview of DGTD and no installation permission or registration of circular looms is required under Textile (Control) Order, 1986. Therefore, the petitioner was advised to approach DGTD. The D.G.T.D. certificate is Annexure P-18 which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall under the Head. 39.20, sub-heading 3920.32 of the Central Excise Tariff Act and not under Head. 54.06, sub-heading 5406.90. Similarly the HDPE sacks fall into Heading 39.23, sub-heading 3923.90." (emphasis supplied) On bare perusal of above portion of judgement, we find that the judgment in case of Raj Pack Well Ltd is squarely applicable in principle to the present case as High Court in said case observed that as per Textiles Committee Act, 1963, any fabric or cloth or yarn or garment if made wholly or in part of cotton, wool, silk, artificial silk or other fibre shall be called textiles and nowhere in definition of textiles or fiber, the word 'plastic' is used. High Court also observed that HDPE sacks arc made from plastic raw-material and they are not man-made filament yarn and that articles of plastic made out of plastic materials should be considered as articles of plastic. High Court observed that Dy. Director of Ministry of Textile informed one of the petitioners that HDPE/Polypropylene weaving activity falls under the purview of DGTD (Plastic and Polymer Directorate) and DGTD registered petitioner's company as Industry producing HDPE woven sacks. The raw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The method of weaving adopted may be the warp and woof pattern as is generally the case in most of the textiles, or it may be any other process or technique. There is such phenomenal advance in science and technology, so wondrous is the variety of fabrics manufactured from materials hitherto unknown or unthought of and so many are the new techniques invented for making fabric out of yarn that it would be most unwise to confine the weaving process to the warp and woof pattern. Whatever be the mode of weaving employed, woven fabric would be `textiles'. What is necessary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to form a fabric. Moreover a textile need not be of any particular size or strength or weight. It may be in small pieces or in big rolls; it may be weak or strong, light or heavy, bleached or dyed, according to the requirement of the purchaser. The use to which it may be put is also immaterial and does not bear on its character as a textile. It mat be used for making wearing apparel, or it may be used as a covering or bedsheet or it may be used as tapestry or upholstery or as duster for cleaning or as towel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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