In re Ready Network Marketing Pvt. Ltd (CAAR Mumbai)
A company, M/s. Ready Network Marketing Private Limited, sought a ruling from the Customs Authority for Advance Ruling (CAAR), Mumbai, on the correct customs classification of 100% Poly Vinyl Alcohol (PVA) Sheets in Roll shape it intends to import from China. The company’s application requested confirmation that the goods should be classified under tariff subheading 3920 99 12 of the Customs Tariff Act, 1975, which would entitle them to a concessional customs duty rate.
Applicant’s Arguments
The applicant described the product as a plain, flexible, non-cellular, and non-reinforced plastic sheet made entirely of polyvinyl alcohol. The sheets are water-soluble in hot water and biodegradable, with a GSM between 20-40, and are supplied in rolls. The company detailed the manufacturing process, which involves producing PVA fibers from polyvinyl acetate (PVAc) and then processing them into sheets. This process, they argued, makes the product a derivative of PVAc. They contended that the sheets were distinct from paper or non-woven fabrics and were specifically plastics.
In its submission, the company relied on the General Rules for the Interpretation (GRI) of the Harmonized System, specifically Rule 1, which prioritizes the terms of the headings and relevant section or chapter notes. The applicant cited the Supreme Court judgment in CCE Nagpur v. Simplex Mills Co. Ltd. (2005), which reinforced this principle. The company argued that since the product is a non-cellular plastic sheet derived from a polymer of Chapter 39, its classification in finished sheet form should be under Heading 3920, which is for “Other plates, sheets, film, foil and strip, of plastics, non-cellular and not reinforced.” The company asserted that the most specific classification was 3920 99 12, which specifically covers “Flexible – Of Polyvinyl Alcohol (PVA).”
