Case Title | Rajivkumar Giriraj Bansal |
Court | Gujarat AAAR |
Honorable Judges | Member P.Gupta & Member Seema Arora |
Citation | 2021 (11) GSTPanacea 69 HC Gujarat GUJ/GAAAR/APPEAL/2021/33 |
Judgement Date | 02-November-2021 |
Council for Petitioner | Manibhai Raval |
Council for Respondent | NA |
Section | Section 100 |
In Favour of | In Favour of Assesses |
The Gujarat Bench of Member J.P.Gupta & Member Seema Arora has held that the product narrow woven fabric of Polypropylene yarn of width not exceeding 30 cms provided with selvedges on both edges manufactured by the appellant merit classification under Tariff heading No. 58063990 of the Customs Tariff Act, 1975, attracting rate of GST @5% (2.5% CGST + 2.5% SGST) or 5% IGST.
FACTS OF THE CASE
The present appeal has been filed under Section 100 of the CGST Act, 2017 and the GGST Act, 2017) by M/s. Rajivkumar Giriraj Bansal (Proprietor of M/s Gujarat Plast Industries) (hereinafter referred to as Appellant) against the Advance Ruling No. GUJ/GAAR/R/99/2020 dated 14.10.2020.
- The appellant has raised the following question for advance ruling in the application for Advance Ruling filed by it.
“Whether narrow woven fabrics manufactured are classifiable under Tariff Heading No. 58063990?”
The Gujarat Authority for Advance Ruling (herein after referred to as ‘the GAAR’), vide Advance Ruling No. GUJ/GAAR/R/99/2020 dated 14.10.2020, inter-alia observed that Note 5 to Chapter 58 defines the narrow woven fabrics as “Woven fabrics of a width not exceeding 30 cm, whether woven as such or cut from wider pieces, provided with selvedges on both egdes” and it was not forthcoming from the submission that the product is having selvedges on both edges and hence it does not meet the definition of narrow woven fabrics and therefore, does not fall under the heading 5806 and to be classified with ordinary woven fabrics. Therefore, GAAR held that the product narrow woven fabrics made of polyester yarn of a width not exceeding 30 cm but not provided with selvedges on both edges is classifiable under sub-heading No. 5407.10.19 of Customs Tariff Act, 1975 and attracts rate of tax of 2.5% CGST+2.5% SGST in case of Intra-State supply or 5% IGST in case of Inter-State supply.
Aggrieved by the aforesaid advance ruling, the appellant has filed the present appeal.
The appellant in the ground of appeal has submitted that the subject goods manufactured by them satisfy the conditions laid by the GAAR, at paragraph 17.1 of the Ruling to classify the subject goods under HSN code 5806 as ‘narrow woven fabrics’. The appellant further submitted that at paragraph 18 of the ruling the GAAR has observed that the product in question is manufactured by process of weaving from polyester yarn and its width is not 30 cm. It was further observed by the GAAR that ‘however it is not forthcoming from the submission that the product is having selvedges (flat of tubular) on both edges’ and GAAR concluded that the product is not provided with a selvedge and consequently it does not meet the definition of narrow woven fabric which is self contradictory and hence bad in law
COURT HELD
Considering the facts as recorded, held that as it is abundantly clear that to classify the product under HSN code 5806 as “narrow woven fabric”, its width should not exceed 30 cm and it should have selvedges (flat or tubular) on both edges. The width of the fabric was never in question and from the forgoing paras, it is clear that the product is provided with selvedges on both sides.
In view of the foregoing, bench modify the Advance Ruling No. GUJ/GAAR/R/99/2020 dated 14.10.2020 of the Gujarat Authority for Advance Ruling in the case of M/s. Rajiv Giriraj Bansal (legal Name) – M/s. Gujarat Plast Industries (Trade Name), and hold that
The product narrow woven fabric of Polypropylene yarn of width not exceeding 30 cms provided with selvedges on both edges manufactured by the appellant merit classification under Tariff heading No. 58063990 of the Customs Tariff Act, 1975, attracting rate of GST @5% (2.5% CGST + 2.5% SGST) or 5% IGST as per Sl. No. 219AA of Schedule-I of Notification No. 1/2017-CT (Rate) dated 28.06.2017 (as amended) and Notification No. 1/2017-IGST (Rate) dated 28.06.2017
ANALYSIS OF THE JUDGEMENT
The appellant submitted that the ruling pass by GAAR is on the premises of the observation “however it is not forthcoming from the submission that the product is having selvedges (flat or tubular) on both edges” is not sustainable. To the effect, the appellant submitted that the product in question is woven from polypropylene yarn in special narrow fabric looms called Needle Loom and its selvedges are formed by weaving itself. The appellant also submitted the samples of the narrow woven fabric as evidence
Bench find that GAAR while passing ruling relied on the observation that it was unclear whether the product is having selvedges (flat or tubular) on both edges or not and held that product is not provided with selvedges on both edges. The submission made by appellant indicates that the selvedges are formed during the weaving process itself.
As it is abundantly clear that to classify the product under HSN code 5806 as “narrow woven fabric”, its width should not exceed 30 cm and it should have selvedges (flat or tubular) on both edges. The width of the fabric was never in question and from the forgoing paras, it is clear that the product is provided with selvedges on both sides
Therefore bench find that the product in question satisfy the conditions of narrow woven fabric mentioned in Chapter Note 5 of Chapter 58 of Customs Tariff Act, 1975. Bench are of the view that the product is to be classified under CTH No. 58063990 and not under CTH No. 54071019 of the Customs Tariff Act, 1975
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