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TMI Blog2025 (3) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... HSN 6201 40 10 since to qualify to be an item under chapter 62, it must be an article of textile fabric. It is not disputed that the item PVC raincoat, in common parlance, is known as apparel. The item being an apparel, which is primarily composed of polyvinyl chloride (PVC), would be classified under HSN 3926 20 as Articles of apparel and clothing accessories (including gloves, mittens and mitts).
Conclusion - Supply of PVC raincoat as manufactured by the applicant would be covered under Heading 3926 and would attract tax @ 18% vide entry no. 111 of Schedule-III of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 [corresponding West Bengal State Notification No.1125 F.T. dated 28.06.2017], as amended. X X X X Extracts X X X X X X X X Extracts X X X X ..... f polyvinyl chloride (PVC) which is a synthetic polymer. These PVC raincoats are produced by cutting large PVC rolls into sections that correspond to the various components of the raincoat, including the front panel, back panel, sleeves, and pockets. To maintain the waterproof quality, traditional stitching is avoided, as needle perforations would compromise the water resistance of the garment. Instead, the applicant employs a specialized fusion method wherein components are thermally or chemically bonded to create a seamless, non-woven structure that enhances the waterproof integrity. Additional features such as polyester zippers, drawcords, buttons, and plastic stoppers are attached to finalize the product, which is then distributed to the market as a finished raincoat. 2.2 The manufacturing process begins with procurement of large PVC rolls, which are segmented into various components corresponding to the raincoat's parts, such as the front and back panels, sleeves, and pockets. Due to PVC's impermeable nature, conventional stitching is avoided to preserve the garment's waterproof integrity, as needle perforations would weaken the material. Instead, the applicant employs a fusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, even if constructed from synthetic polymers like PVC, are appropriately classified under Chapter 62 if they serve as articles of apparel. Relevant Extract as under- *** "5.3 The applicant has submitted that to manufacture PVC raincoat the small PVC sheets are generally not stitched with a needle and thread. Since PVC is nonporous, a needle would leave a large hole that would allow water to enter, making for a very ineffective raincoat, and weakening the seam. Instead, PVC seams are generally "welded" (sealed) with heat, or bonded by chemical means. Either way, all the pieces of materials are melt together, either thermally or chemically, and are permanently bound. Thus, it is a non-woven product. Chapter Note 1 of Chapter 61 states that "This Chapter applies only to made up knitted or crocheted articles". Therefore, by applying this chapter note 1 ibid it is amply clear that PVC raincoat cannot be classified under heading 6101: Men's or boys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets) wind-cheaters, wind-jackets and similar articles, knitted or crocheted, other than those of heading 61.03. Articles covered under heading 6103 are also knitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind-cheaters, and similar items, which encompass raincoats of different material classifications: * 620120: Articles made from wool or fine animal hair, including overcoats and raincoats. * 620130: Articles made from cotton, including overcoats and raincoats. * 620140: Articles made from man-made fibers, including overcoats and raincoats. * 620190: Articles made from other textile materials, including overcoats and raincoats. The classification argument is strengthened by multiple factors: Common Understanding and Product Specificity: * A raincoat is universally recognized as an outer garment worn over clothing specifically for protection against rain, similar to how a sweater serves as protection against cold. * This parallel extends to classification principles, as exemplified by how potato chips in commercial products like Lay's are classified as prepared food rather than raw potatoes. Explicit Legislative Intent: * The repeated mention of raincoats across different subcategories within Chapter 6201 demonstrates clear legislative intent. * Each type of raincoat has been specifically addressed based on its constituent material, providing comprehensive cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , pertinent judicial precedents, and recognized commercial practices. The applicant argues that these evidences collectively illustrate the rationale for categorizing these garments as textile rather than plastic products. Understanding "Textile Garments" in the Tariff Context Section Note 14 of Section XI of the Customs Tariff Act stipulates that "textile garments" must be classified according to their respective headings, specifically those ranging from 6101 to 6114 and 6201 to 6211. This regulation clarifies that garments categorized as "textiles" must be classified within the designated headings. Broad Definition of Textiles The Customs Tariff Act does not offer a precise definition of the terms "textile" or "textile material." However, it defines textile fabrics in Chapter 59. This definition applies solely to the provisions of Chapter 59, as outlined in Note 1, which states: "Except where the context otherwise requires, for the purposes of this Chapter, the expression 'textile fabrics' pertains only to the woven fabrics classified under Chapters 50 to 55 and headings 5803 and 5806, the braids and ornamental trimmings presented in heading 5808, and the knitted or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Textile Institute, expands the definition of the term "textile." Traditionally, textiles were understood solely as woven fabrics. However, contemporary usage encompasses a broader range of materials, including fibres, filaments, and yarns, whether derived from natural sources or manufactured. This expanded definition includes a variety of products that utilise these materials as primary components, such as threads, cords, ropes, braids, woven, knitted, and nonwoven fabrics, as well as lace, nets, embroidery, hosiery, knitwear, readymade garments, household textiles, soft furnishings, upholstery, carpets, and various technical, industrial, and engineering textiles. In the specific case of PVC raincoats, although they are composed of polyvinyl chloride (PVC) and manufactured by extruding PVC filaments from granules, it is essential to note that they do not incorporate traditional weaving techniques. 2.11 Statutory Understanding of 'Fibre' and Legal Framework Although 'fibre' does not possess a statutory definition, the "Encyclopedia of Textile Fibres and Non-woven Fabrics" offers a classification system that delineates naturally occurring and man-made fibres. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rubber products. The judgment also referenced Chapter Note 2(a) of Chapter 62, which clarifies that "worn" pertains to old and used clothing, not newly manufactured items such as rainwear. Importantly, the Tribunal relied on the Supreme Court's decision in Commissioner of Central Excise v. MRF Ltd. [1998 (97) ELT 23 (SC)], which established the fundamental principle that if the raw material employed is not vulcanized rubber, the finished product cannot be classified under a heading designated for vulcanised rubber items. This Supreme Court precedent was instrumental in supporting the classification of rainwear under Chapter 62, as these products were made from rubberised textile fabric rather than vulcanised rubber, rendering classification under Heading 4015.00 unwarranted. This judicial interpretation aligns with the Harmonized System of Nomenclature (HSN) and Customs Tariff definitions, reinforcing the argument that PVC raincoats, despite their synthetic composition, are appropriately classified under HSN 6201 4010. The Supreme Court, in the case of Collector of Central Excise versus India Waterproofing & Dyeing Works [1996 (87) E.L.T. 340 (S.C.)], unequivocally affirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished legal precedents * International classification guidelines This analysis demonstrates that PVC raincoats, despite their synthetic origin, are appropriately classified as textile garments under chapter heading 6201, consistent with both modern textile definitions and established classification principles. 2.15 The classification of PVC raincoats is guided by specific exclusionary provisions in Chapter 39 of the Schedule. A careful examination of these provisions clearly establishes that PVC raincoats, despite containing plastic materials, are properly classified as textile articles rather than plastic products. (i) Definition and Scope of "Plastics" The second paragraph of Note 1 to Chapter 39 provides a comprehensive definition of "plastics": "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remain eligible for classification under the chapters of Section XI. The exclusion outlined in Note 1(h) aims to prevent overlap with Chapter 39 for articles that are fundamentally textile products but with plastic enhancements. However, in the case of PVC raincoats, the integral construction as nonwoven PVC articles situates them appropriately within the textile categories of Section XI, consistent with other fabric and garment classifications. Therefore, PVC raincoats retain their classification under the chapters of Section XI, reflecting the comprehensive nature and functionality of the product as a garment rather than a mere article of plastic. 2.18 The applicant, therefore, contends that PVC raincoats, despite their synthetic composition, are appropriately classified under HSN 6201 4010, consistent with legislative provisions, judicial interpretation, and commercial practices. This classification aligns with the intended function, material characteristics, and the evolving definition of textile apparel, supporting a GST rate of 5% when priced below Rs. 1,000. The applicant respectfully requests a ruling confirming this classification under HSN 6201 4010 for PVC raincoats to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of custom tariff code states "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." Further, note 2 ibid states that - "This Chapter does not cover: (p) goods of Section XI (textiles and textile articles) The applicant has made comprehensive explanation regarding process of making PVC raincoat from where it is evident that PVC raincoats are produced by cutting large PVC rolls into sections that correspond to the various components of the raincoat, including the front panel, back panel, sleeves, and pockets. Maintaining waterproofing quality is utmost important, therefore, traditional stitching is avoided, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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." 4.8 The applicant contends that that PVC raincoat, despite their synthetic composition, is to be classified under HSN 6201 4010. We find that Chapter 62 is meant for "Articles of apparel and clothing accessories, not knitted or crocheted". Note (1) of this chapter further speaks that "This Chapter applies only to made up articles of any textile fabric other than wadding, excluding knitted or crocheted (other than those of heading 6212)." Thus, to cover under this chapter, a PVC raincoat must fall under the category of a made up article of textile fabric. We find that in the case of Bengal Waterproof Limited vs Commissioner of Central Excise supra, the issue was whether rubberised textile fabric manufactured by the Appellant is covered by Chapter 59 and Heading No. 59.06 and Rainwear manufactured out of such material is covered by Chapter 62 under heading No. 62.01. The process of manufacturing was submitted by the appellant as follows: "the process of manufacture of rainwear requires ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding thermal stability and preventing oxidation. 5. Fillers and Pigments: Various fillers and pigments may be added to enhance specific properties or add color to the PVC sheet. PVC Sheet Manufacturing Process The production of PVC sheet involves several stages, each contributing to the final product's quality and characteristics. Let's explore the step-by-step process of making PVC sheet: 1. Polymerization The journey to creating PVC sheet begins with polymerization. In this stage, the vinyl chloride monomer (VCM) undergoes a process called polymerization, where multiple VCM molecules link together to form polymer chains. This process is typically achieved through either suspension polymerization or emulsion polymerization. 2. Production of PVC Resin After the polymerization process, the resulting product is PVC resin. This resin is in the form of small particles, often referred to as PVC resin granules. These granules will serve as the base material for the PVC sheet. 3. Compounding The next step is compounding, where the PVC resin is mixed with various additives to improve its properties. Plasticizers, stabilizers, fillers, and pigments are precisely measure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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