Case Law Details
In re Fancy Ribbon House (CAAR Mumbai)
The Customs Authority for Advance Rulings (CAAR), Mumbai, addressed the classification of various textile rolls, including Nylon Taffeta, Polyester Taffeta, and Satin rolls, ranging in width from 10 mm to 305 mm. These products, proposed for import by Fancy Ribbon House, were evaluated for classification under the Customs Tariff Act, 1975. The applicant argued that the rolls, primarily used as labels, fell under Heading 5807, which pertains to “Labels, badges, and similar articles of textile materials, in strips or cut to shape or size, not embroidered.” The Authority reviewed past rulings and legal precedents, including similar cases like those of M/s Mahaveer Impex and M/s Mean Light Co., and consulted the Harmonized System of Nomenclature (HSN) Explanatory Notes to assess the applicable classification.
After extensive deliberation, the Authority concurred with the applicant’s stance, confirming that the products were correctly classified under Heading 5807. The ruling emphasized that these textile rolls, due to their design and functional characteristics, are akin to labels and meet the criteria outlined in the HSN explanatory notes. Furthermore, the decision reaffirmed the principles of classification based on common parlance and functional utility, as upheld in several legal judgments. The ruling concluded that the products are classifiable at the 8-digit level under specific sub-headings of Heading 5807, corresponding to their material composition, and are covered under Entry No. 153 of Schedule II of Notification 1/2017 – IGST (Rate), dated June 28, 2017.
Classification of “Rolls made of Nylon Taffeta roll, Polyester Taffeta roll, Tearaway Taffeta roll, Iron on fusing Taffeta roll, Single side slit polyester satin roll, double side slit polyester satin roll, Single side woven edge polyester satin roll, Double side woven edge satin roll, Single side slit polyester cotton roll, Recyclable Single side slit polyester satin roll etc. which are available with width ranges from 10 millimeter to 305 millimeter.”
RELEVANT TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
5. I have taken into consideration all the materials placed on record in respect of the products intended to be imported including the submissions made by the applicant during the course of personal hearing. I have gone through the response received from the Chennai Customs House. I therefore proceed to decide the present applications regarding classification of “Rolls made of Nylon Taffeta roll, Polyester Taffeta roll, Tearaway Taffeta roll, Iron on fusing Taffeta roll, Single side slit polyester satin roll, double side slit polyester satin roll, Single side woven edge polyester satin roll, Double side woven edge satin roll, Single side slit polyester cotton roll, Recyclable Single side slit polyester satin roll etc. which are available with width ranges from 10 millimeter to 305 millimeter with printable feature more specifically described in Table ‘A’ (supra) collectively referred to as Products’ on the basis of the information on record as well as the existing legal framework having bearing on the classification of the products in question under the first schedule of the Customs Tariff Act, 1975
6. In the earlier rulings of this authority in the cases of M/s. Mahaveer Impex and M/s. Mean Light Co. which were passed on the question of classification of the same/similar products i.e. “Rolls made of Polyester, Nylon Taffeta, Satin etc. available with width ranges from 10 millimeter to 810 millimeter with printable feature Customs Authority for Advance Rulings has concurred with the submissions put forth by the authorized representative Shri S. S. Gupta, Advocate present for M/s. Mahaveer Impex and M/s. Mean Light Co. In the instant case Shri S. S. Gupta representative advocate was present for the applicant M/s. Fancy Ribbon House and has submitted the very same arguments supported with relevant case laws as discussed above and sought classification of the said ‘products’ under Heading 5807 10 and advocated that the said ‘products’ are duly covered by entry no. 153 of Schedule II of Notification 1/2017 — IGST (Rate) dated 28 June 2017. I have gone through the observations of the Authority in the cases of M/s. Mahaveer Impex and M/s. Mean Light Co.. I am of the view that the Authority in the cases ibid has deliberated upon every aspect to decide the case on merit.
6.2. Chapter heading 58.06 covers Narrow woven fabrics, other than goods of heading 58.07; narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs).
5806 10 00 – Woven pile fabrics (including terry toweling and similar terry fabrics) and chenille fabrics
5806 20 00 – Other woven fabrics, containing by weight 5% or more of elastomeric yarn or rubber thread
– Other woven fabrics:
5806 31 If cotton
5806 32 00 Of man-made fibres
5806 39 of other textile materials
5806 39 90 — Other
5806 40 00 – Fabrics consisting of warp without weft assembled by means of an adhesive (bolducs)
In order to understand the scope of this tariff heading it is essential to refer to the HSN Explanatory note to CT1-158.06 which provide as under: –
(A)Narrow Woven Fabrics
In accordance with Note 5 to this Chapter, this heading includes as narrow woven fabrics:
(1) Warp and weft fabrics in strips of a width not exceeding 30 cm, provided with selvedge- (flat or tubular) on both edges. These articles are produced on special ribbon looms several ribbons often being produced simultaneously; in some cases, the ribbons may be oven with wavy edges on one or both sides.
(2) Strips, of a width not exceeding.30 cm, cut (or slit) from wider pieces of warp and weft fabric (whether cut (or slit) longitudinally or on the cross) and provided with false selvedge, on both edges, or a normal woven selvedge on one edge and a false selvedge on the other. They may also be created when a fabric is treated before it is cut into strips in a manner that prevents the edges of those strips from unravelling. No demarcation between the narrow fabric and its false selvedges need be evident in that case. Strips cut (or s it) from fabric but not provided with a selvedge, either real or false, on each edge, are excluded from this heading and classified with ordinary woven fabrics.
(3) Sean less tubular warp and weft fabrics, of a width when flattened, not exceeding 30 cm. fabrics consisting of strips with the edges joined to form a tube (by sewing, gumming or otherwise) are, however, excluded from this heading.
(4) Bias binding consisting of strips, with folded edges, of a width, when unfolded, not exceeding 30 cm, cut on the cross from ,warp and weft fabrics. These products are cut from wide fabrics and not provided, therefore, with a selvedge. either real or false. These products remain classified here when watered (“moire”), embossed, printed, etc. Bolduc.
‘This heading also covers narrow fabrics (bolducs) of a width usually ranging from few mm to 1 cm, consisting of warp (parallelized yarns, monofilaments Or textile fibres) without weft but assembled by means of an adhesive.
This heading excludes:-
(a) Bandages, medicated or put up in forms or packings for retail sale (heading 30.05).
(b) Narrow woven fabrics with woven fringes, braided galloons and braids_kheadinA58.08).
(c) Narrow woven fabrics more specifically covered by other headings, e.g., those having the character of:
(1) Woven labels, badges and similar articles, in strips (heading 58.07 or 58.10)
6.3. Chapter heading 58.07 covers labels, badges and similar articles of textile materials, in the piece, in strips or cut to shape or size, not embroidered.
5807 10 – Woven
5807 10 10 — Of cotton
5807 10 20 — Of mnan-made fibre
5807 10 90 — Other
5807 90 – Other
As per FISN Explanatory notes to CTH 58.07, subject to the conditions specified below, this heading covers:
(A) Labels of any textile material (including knitted). These include labels of a kind used for marking wearing apparel, household linen, mattresses, tents, soft toys, or other goods. They are utilitarian labels bearing individual inscriptions or motifs. Such labels include, inter commercial labels bearing the trade.name or trade mark of the manufacturer or the nature of the constituent textile (“silk”, “viscose rayon”, etc.) and labels used by private individuals (boarding school pupils, soldiers, etc.) to identify their personal property; the latter variety sometimes bear initials or figures or comprise sometimes a framed space to take a hand written inscription.
(B) Badges and similar articles of any textile material (including knitted). This category includes badges, emblems, “flashes”, etc.. of a kind normally sewn to the outer part of wearing apparel (Sporting, military, local or national badges, etc., badges bearing the names of youth associations, sailors’ cap badges with the name of a ship, etc.). The above articles are classified in this heading only if they fulfil the f011oWing conditions:
(1) They must not be embroidery. The inscriptions or motifs on the articles classified here are generally produced by weaving (usually broche work) or by printing.
(2) They must be in the piece, in strips (as is usually the case) or in separate units obtained by cutting to size or shape but must not be otherwise made up.
This heading does not include labels; badges and similar articles, which have been embroidered (heading 58.10) or made up otherwise than by cutting, to shape or size (heading 61.17, 62.17 or 63.07).
6.4. From the descriptions of the. products as seen in Table-A above, I find that the same are of various type having sizes ranging from 10 mm to 305 mm. However, there is only one item in the list of products having. width. exceeding 300 mm, namely ‘Nylon Taffeta Roll – 305 mm’. I also find a plethora of case laws/judgements cited by the applicant in furtherance of their case. The applicant has .claimed that the impugned goods arc made of woven materials and are not embroidered and that there is no alternative use of’ the products except as labels. I observe that this is obligatory on their part so as to approve the intended classification of the subject goods under CTH 5807.
6.5 The products under reference ,have sizes ranging from 10mrn to 305mm and can be considered as narrow. woven fabric and it is in association with the HSN explanatory notes to the CTH 5806 either, which clearly excludes:
(c) Narrow woven fabrics more specifically covered by other headings, e.g., those Having the character of Woven labels, badges and similar articles, in strips (heading 58.07 or 58.10)
The HSN Explanatory notes to CTU 58,07, subject to the .conditions specified, cover the labels of any textile material. These include labels of a kind used for marking wearing apparel, household linen,. mattresses, tents, soft toys, or other goods. They are utilitarian labels bearing individual inscriptions or motifs. Such labels include, inter alia, commercial labels bearing the trade name or trade mark of the manufacturer or the nature. of the constituent textile (“silk”. “Viscose rayon”,. etc.) and. labels used by. private. individuals.(boarding school pupils, soldiers, etc.)identify -their personal property; .the latter variety sometimes bear initials or -e sometimes a framed space to take a hand written inscription. Condition s must not. be embroidery. In the instant case the goods will be imported )f labels .on them. Applicant has argued that the textiles labels printed or. sifiable under FISN 5807 10. It is submitted, by applicant that the CTH 5807 e a label to be printed for classification under the heading. Further, there –is lit in. no such requirement in the chapter and. section notes. In support of this argument the applicant has father submitted that the Hon’ble Calcutta High Court in the case of M/s Bijay Kumar poddar vs Union of. India .2000 (126) ELT 393 (Calcutta) .has held. the plain label strips as ‘labels considering” that it is .meant for printing and there is no alternate use of the same. The related sub-heading 5807 provides and covers labels and similar articles. Crux of the judgment is narrated in para 25 .of the Court order and the same is. reproduced supra.
Hon’ble High Court has further opined that the CTH 15807 10 provides and covers labels and similar articles. Notwithstanding whether the imported goods came with printing on it or not then also, the Court held that, if it is not label in strict sense then also the material imported can be said similar to label. While delivering the judgment on classification Hon’ble High court discussed few apex court decisions are as follows:
In the case of Atul Glass Industries Ltd. and Others v. Collector of Central Excise and ) Other- 19686 (25) E.L.T. 473 (S.C.) wherein Hon’ble Supreme Court has observed in para 8 as under:
8. The test commonly applied to such cases is: flow is the product identified by the class or section of people dealing with or using the product? That is a test which is attracted whenever the statute does not contain any definition. ……………. it is generally by its functional character that a product is so …… When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between the article and the need it supplies in his life. It is the fictional article which identifies it in his mind. In the case of a glass, mirror, the primarily the consumer recalls primarily the reflective function of the article more than anything else. It is a mirror an article which reflects images. Its referred to as a glass mirror only because the word glass is descriptive of the mirror in that glass has been used as a medium for manufacturing the mirror. The basic or fundamental character of the article lies in its being a mirror.”
Similarly in the case of Commissioner of Customs & C. F.A., Amritsar v. D.L. Steels – 2022 (381) E.L.T. 289 (S.C.) it was observed by Hon’ble Court that “…….. well-settled principle that words in a taxing statute must be construed in consonance with their commonly accepted meaning in the trade and their popular meaning. When a word is not explicitly defined, or there is ambiguity as to its meaning, it must be interpreted for the purpose of classification in the popular sense, which is the sense attributed to it by those people who are conversant with the subject matter that the statute is dealing with. This principle should commend to the authorities as it is a good fiscal policy not to put people in doubt or quandary about their tax liability. The common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law-maker.”
Applying the same ratio, the product commonly identified by the section of people dealing in or using the same would be known as Label due to its functional character. Further, due to the exclusion clause the said label or similar articles in strip would not be covered under heading 58.06.
6.6. Further, labels, badges and similar articles of textile materials, in the piece, in strips or cut to shape or size, not embroidered are covered under Heading 58.07. The Apex Court in the case of CCE, Shillong vs. Wood Craft products ltd., 1995 (77) E.L.T. 23 (S.C.) has observed that ‘Words & Phrases – “similar” and “same” – The word “similar” is expansive and not restrictive like “same’. It would be not out of place to mention that in similar context in Nat Steel Equipment Private Ltd. vs. Collector of Central Ex., 1988 (34) E.L.T. 8 (S.C.), while considering the meaning of the word “similar” in a tariff item, it was stated as follows:
…………. The expression “similar” is a significant expression. It does not mean identical but it means corresponding to or resembling to in many respects; somewhat like; or having a general likeness. The statute does not contemplate those goods classed under the words of ‘similar description’ shall be in all respects the same if it did these words would be unnecessary. These were intended to embrace goods but not identical with those goods…. “
I also find that various courts in a plethora of cases have held that 1-ISN explanatory notes have a persuasive effect in deciding the matters of classification. Keeping in view the observation of Apex Court in various decisions referred in forgoing paras as well as the decision of High Court decision in case of M/s Bijay Kumar Poddar vs Union of India, I find that the–said products have to be considered as articles similar to labels of textile materials in strips and accordingly are classifiable under heading CTH 58.07. I do not find any grounds to disagree with the High Court decision in case of M/s vijay Kumar Poddar vs Union of India 2000 (126) ELT 393 (Calcutta) on the issue of classification in the instant case.
7. In view of above facts, circumstances of the case and the ratio of the legal pronouncements as discussed abo’ „ my reply is ‘positive’ to both the questions (a) & (c) asked by the applicant in para.-2.7 (supra and I rule that the Rolls made of Nylon Taffeta roll, Polyester Taffeta roll. Tearaway Taffeta roll, Iron on fusing Taffeta roll, Single side slit polyester satin roll, double side slit polyester satin roll, Single side woven edge polyester satin roll, Double side woven edge satin roll, Single side slit polyester cotton roll, Recyclable Single side slit polyester satin roll etc. which are available with width ranges from 10 millimeter to 305 millimeter more specifically described in as under in Table ‘A’ (supra) collectively referred to as ‘Products’ proposed to be imported by the applicant merit classification as articles similar to label of textile material strips under CTH 5807 according to their constituting materials and design of the Customs ‘Tariff. Accordingly, the subject goods as reflected in Table ‘A’ are classifiable at 8-digit level u der CTH 5807 1010 (Of cotton), 5807 1020 (Of man-made fibre) & 58071090 (Other) according to their composition and characteristics. The above said ‘products’ are covered by entry no. 153 of Schedule II of Notification 1/2017 — JUST (Rate) 28 June 2017.
8. I rule accordingly.
