Circular issued by Tax Research Unit clarifying classification of polypropylene woven and non-woven bags quashed

Association Of Technical Textiles Manufacturers And Processors & Anr Vs Union Of India & Ors (Delhi High Court)

Delhi High Court held that in the absence of a conferral of any power upon the Tax Research Unit (TRU), it cannot issue clarification regarding the classification of polypropylene woven and non-woven bags under the Customs Tariff Act, 1975. Accordingly, Circular dated 31 December 2018 issued by TRU is quashed and set aside.

Facts-

The first petitioner, which is an association of technical textiles manufacturers and the second petitioner which is a member of the said association, are principally aggrieved by the Circular dated 31 December 2018 issued by the Tax Research Unit constituted under the first respondent, and to the extent that it purports to clarify that polypropylene woven and non-woven bags including those laminated with Biaxially Oriented Polypropylene are liable to be classified as falling under Chapter 39 and more particularly Tariff Heading 3923 forming part of the First Schedule to the Customs Tariff Act, 1975. The dispute essentially related to a question of classification of polypropylene woven and non-woven bags under the Harmonized System of Nomenclature.

Conclusion-

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