Case Law Details

Case Name : In re Girish Rathod (Jay Ambey) (GST AAR Gujarat)
Appeal Number : Advance Ruling No. GUJ/GAAR/R/86/2020
Date of Judgement/Order : 17/09/2020
Related Assessment Year :
Courts : AAR Gujarat (169) Advance Rulings (1751)

In re Girish Rathod (Jay Ambey) (GST AAR Gujarat)

Question: Whether the product ‘Fusible Interlining Fabrics of Cotton’ is correctly classifiable under Chapter 52 or Chapter 59?”

Answer: The product ‘Fusible Interlining Fabrics of Cotton’ of the applicant M/s Girish Rathod(Jay Ambey), Ahmedabad is correctly classifiable under Heading 5903 of Chapter 59 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975).

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT

The applicant M/s. Girish Rathod (Jay Ambey)located Opposite Shri Govind Process, 183-1, Bhagirath Process, Shahwadi-Ranipur, Narol, Ahmedabad-382405 are engaged in the manufacture of various textile material including the product under consideration i.e. Fusible interlining fabrics of cotton’ and has been in this business of manufacture of such product since 2011. The applicant has stated that the said product is generally used in the market by the tailors for stitching purpose and for preparing finished articles of clothing and as for the manufacture of the said product, the applicant as also other manufacturers of the said product, coat one side of the cotton fabric material with pulverised plastic powder by dot matrix printing process thereby creating a partial layer of such plastic on the fabric; that the said layer however, does not create an unbroken, uninterrupted or comprehensive plastic layer but only partially covers the fabrics with pulverized plastic having a ‘dot matrix’ design and does not make the material completely impervious as is the case of fabric where the plastic layer is installed as a skin and is whole and uninterrupted.

2. The applicant has submitted that under the erstwhile Central Excise regime, the fusible interlining fabrics were initially classified under various chapters from chapter 50 to 55 of the tariff depending upon the nature of the fabrics; that the said understanding was not only prevalent in the market but was also confirmed by virtue of clarification issued by the board; that by virtue of amendment to the Central excise Tariff made vide Finance Act, 1989, the classification of the said product was changed in a manner that the said goods were thereafter, classifiable under Chapter Heading 5903; that all the manufacturers of the said product, thereafter started clearing the said goods under Chapter Heading 5903 of the erstwhile Tariff; that on the basis of the clearance pattern adopted by other manufacturers, the applicant also started clearing the said goods under Chapter 5903 and the said classification was also retained by the applicant when transition was made from the erstwhile Central Excise legislation to the present Goods and Service Tax regime; that recently, is has come to the notice of the applicant that Appellate Tribunal, Chennai has recently by way of an Order No.41941/2018 dated 19.06.2018 in the case of M/s. Madura Coats pvt. ltd. vs. Commissioner of Central Excise in Appeal No. E/31/2012 had held that the product ‘Fusible Interlining Fabrics of Cotton’ were not classifiable under Chapter 5903 but was correctly classifiable under Chapter 52 of the erstwhile Tariff; that in support of the said conclusion, the Tribunal had noted that the very basis for changing the classification i.e. Note 2(c), which was introduced in Chapter 59, has thereafter been deleted w.e.f. 16.03.1995 and therefore, the position as existed prior to introduction of the said note would be restored; that the product manufactured by M/s. Madura Coats pvt.ltd. is identical to the goods manufactured by the applicant as also other manufacturers throughout the Country. The applicant has also submitted that subsequent to the pronouncement of the said decision, many of the other manufacturers including M/s. Madura Coats pvt.ltd. have revised their classification from Chapter 59 to Chapter 52 of the present Tariff. They have submitted a copy of the aforementioned order of the Appellate Tribunal.

3. The applicant has submitted that the classification of the said product has undergone various changes in the last few decades which would have a strong bearing on the classification of the product under the present regime; that the product ‘Fusible Interlining Fabrics’ were initially classifiable under Chapter 50 to 55 of the erstwhile Central Excise Tariff depending upon the nature of fabrics; that ‘Fusible Interlining Fabrics made out of cotton fabrics being a product of cotton fabrics was classified under Chapter 52 of the erstwhile Tariff; that the classification of the product underwent a change by virtue of amendment made vide Finance Act, 1989 vide which Note 2(c) came to be introduced in Chapter 59 of the tariff to provide that fusible interlining cloth made by discrete coating of plastic by dot matrix process would be classified under Chapter Heading 5903 and the said note read as under:

“Textile fabrics, partially or discretely coated with plastic by dot printing process (heading no.59.03)”

4. The applicant further submitted that before introducing the said amendment, the Board had vide Circular dated 02.09.1988 earlier clarified that fusible interlining cloth, to merit classification as coated fabrics under CETH 5903, should meet the following requirements:

(a) It should have a continuous and adherent film or layer of plastic on one side of the fabric surface.

(b) The fabric should be impervious.

(c) It should satisfy the conditions prescribed in Note 2 of Chapter 59.

5. The applicant has submitted that the said clarification was however, amended vide telex dated 30.09.1988 by virtue of which the requirement of plastic layer being “continous” was removed and another Circular No.5/89 dated 15.06.1989 was also issued by the Board around the same time, clarifying that new note was being introduced in Chapter 59 of the Tariff in order to include fusible interlining cloth made by discrete coating of plastic by dot matrix process in Chapter Heading 5903; that in the said circular, it was also clarified that prior to such amendment they were covered under Chapter 52 to 55 depending upon the textile materials used-whether cotton or man­made fabrics etc.; that thereafter, the said note was further modified w.e.f. 20.03.1990 to provide as under:

“Textile fabrics, partially or discretely coated with plastic (heading no.59.03)”

6. The applicant has submitted that by virtue of amendment brought about w.e.f. 16.03.1995, the said note came to be deleted and was removed from Chapter 59 of the Tariff; that on account of the said amendment, various doubts were raised in the trade regarding the correct classification of fusible interlining fabrics; that as an attempt to clarify their stand, the Board vide Circular dated 27.11.1998 expressed that the omission of the note was neither intended to nor resulted in changing the classification of fusible interlining cloth under Heading 5903; that not being agreeable with the stand of the Department as conveyed vide the aforesaid circular, M/s. Madura Coats preferred a writ petition in the High Court of Madras being WP No.354 of 1999 wherein vide order and judgement dated 30.09.2003, the Hon’ble High Court of Madras held that a bare perusal of the tariff heading and notes in issue, it was clear that but for the Chapter Note 2(c), which was introduced under the Finance Act, 1989, such fusible interlining would be coming within Chapters 50 to 55 and only by virtue of introduction of Chapter Note 2(c) of Chapter 59, such fusible interlining came within the scope of Chapter 59.03; that once such Chapter Note 2(c) of Chapter 59 was omitted under the Finance Act, 1995, it is obvious that the position which was available prior to introduction of such Chapter Note (c) revived; that in such background, issuance of Circular would be clearly against the statutory provisions; that the Hon’ble Court also noted that the circular was also against the provision of Section 37B of the Central Excise Act as the Board could not shut down the quasi-judicial power of the authorities and in view of the aforesaid finding, the Circular issued by the Board was held to be invalid and illegal.

7. The applicant has submitted that the said order of the Single Judge of the Madras High Court was challenged by the Department before the Division Bench of the Madras High Court under W.A.No.507 of 2005 wherein vide order and judgement dated 05.01.2009, the Hon’ble Division Bench of the Madras High Court dismissed the Writ Appeal and upheld the judgement of the Single Judge as regards the quashing of the circular in view of Section 37B of the Central Excise Act, however no opinion was rendered on the merit of the case and the assessing officer was directed to adjudicate the matter on its own merits; that upon adjudication of the case by the assessing authorities, the issue was held against M/s. Madura Coats pvt.ltd. which became a subject matter of appeal being Appeal No.E/31/2012-DB before the Appellate Tribunal, Chennai; that in the said appeal, the Appellate Tribunal vide order dated 19.06.2018, upheld the contention of M/s. Madura Coats and confirmed that classification of the goods could not be made under Chapter 59 of the Tariff after deletion of the Note 2(c) to Chapter 59; that while coming to the said conclusion, the Appellate Tribunal noted and observed that introduction of Note 2(c) was merely to widen the types of textile fabrics which could be brought under the fold of CETH 5903 and after deletion of Note 2(c), the classification under Chapter 59 would have to be done by keeping in view the existing Chapter Note 2(a) as also the Circular dated 02.09.1988 and 30.09.1988 issued by the Board in this regard; that upon perusal of the said circular as also the chapter note, the Appellate Tribunal concluded that the stand of the Department that even after deletion of Note 2(c) to Chapter 59, the goods namely Fusible Interlining Fabrics continued to be classified under Chapter 59, was illegal and without any merit in law; that similar litigation was also initiated before other High Courts after deletion of the aforesaid note; that in the case of Surya Processors P.ltd. reported in 2000(115) ELT 48(ALL), the Hon’ble Allahabad High Court also held that Chapter 59.03 was not relevant for classification and was in fact, excluded from the purview of Chapter 59 in view of the existing Note 2 by virtue of which the correct classification would be under Chapter 50 to 55 of the Tariff depending on the predominance of the textile material; that in view of the aforesaid finding, the Hon’ble High Court of Allahabad mandated that the authorities would not be permitted to classify the goods of the petitioner therein under Chapter 59 of the Tariff and the same must be classified under Chapter 50 to 55 depending upon other factors.

8. The applicant has further submitted that a perusal of the aforesaid judgements and decisions would show that the present position in law is that upon deletion of the Note 2(c) from Chapter 59, the position existing as on prior to introduction of the said note would again come into force; that it is also consistently observed that prior to introduction of the said note, the product ‘fusible interlining fabrics’ were classifiable under Chapter 50 to 55 of the tariff depending upon the predominant nature of fabric used; that to understand and appreciate the characteristics of the product i.e. fusible interlining fabrics of cotton manufactured by the applicant, a test report dated 02.08.2018 issued by the Ahmedabad Textile Industry’s Research Association (copy submitted) where upon examination of the product manufactured by the applicant, it is observed as under:

1. …………

2. The product is polymer coated on one side. Coating cannot be seen with the naked eye. Coating is non-continuous. This coating is different than film coating. Film coating is visible with naked eye.

3. The product can be bent without fracturing around a cylinder of a diameter 7m or more at temperature between 15C to 30C.

4. The fabric is not completely embedded in plastic.

5. Product is coated on one side only.

6. The product is covered with plastic polymer on one side and bears a design like a dot matrix design resulting from coating process.

7. The fabric is porous and pervious.

The product is cotton fusible interlining.

9. The applicant has stated that on perusal of the test report, it can be seen though there is a coating on one side of the fabric but such coating is porous and pervious and does not completely restrict/prohibit passing of liquid/air through it; that it can be noted that such application of plastic is very thin and cannot be seen with naked eye as a film; that keeping the aforesaid facts in mind, the scope of Chapter 52 and 59 of the erstwhile Central Excise Tariff may be seen and noted; that Chapter 52 covers within its fold various cotton products in the form of yarns, fabrics etc. whereas Chapter 59 on the other hand covers goods in the nature of impregnated, coated, covered or laminated textile fabrics, textile articles of a kind suitable for industrial use; that Chapter Heading 5903 under the said Chapter covers “Textile fabrics, impregnated, coated, covered or laminated with plastics, other than those of heading 5902; that Note 2 to the said Chapter provides that Heading 5903 applies to:

(a) textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square metre and whatever the nature of the plastic material (compact or cellular), other than:

(1) fabrics in which the impregnation, coating or covering cannot be seen with the naked eye (usually Chapters 50 to 55, 58 or 60); for the purpose of this provision, no account should be taken of any resulting change of colour;

(2) products which cannot, without fracturing, be bent manually around a cylinder of a diameter of 7 mm, at a temperature between 15oC and 30oC (usually Chapter 39);

(3) products in which the textile fabric is either completely embedded in plastics or entirely coated or covered on both sides with such material, provided that such coating or covering can be seen with the naked eye with no account being taken of any resulting change of colour (Chapter 39);

(4) fabrics partially coated or partially covered with plastics and bearing designs resulting from these treatments (usually Chapters 50 to 55, 58 or 60);

(5) plates, sheets or strip of cellular plastics, combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (Chapter 39); or

(6) textile products of heading 5811;

10. The applicant has submitted that a perusal of the aforesaid chapters as also the characteristics of the product manufactured by the applicant, it is clear that the product manufactured by the applicant does not fall within the four corners of Chapter 59 and is correctly classifiable as Cotton Fabrics under Chapter 52 of the Tariff; that in support of the said view, certain important characteristics of the product manufactured by the applicant which falls within the excluded category of the goods falling within the purview of Chapter 59 may be noted; that the product manufactured by the applicant is a fabric which is coated with pulverized plastic but such coating can neither be seen with naked eye nor can be said to be complete/comprehensive so as to completely cover the fabric, as would be the case in case of impregnation of a material similar to a film; that as can be seen in note 2 to the said Chapter, fabrics which are partially coated or covered bearing designs resulting from such treatments otherwise falling are excluded from the purview of Chapter Heading 5903 and are observed to fall under Chapter 50 to 55, 58 or 60 and reference may be invited to Circular dated 02.09.1980 of the Board clarifying that fusible interlining cloth, to merit classification as coated fabrics under CETH 5903, should meet the following requirements:

a) It should have a continuous and adherent film or layer of plastic on one side of the fabric surface.

b) The fabric should be impervious.

c) It should satisfy the conditions prescribed in Note 2 of Chapter 59.

11. The applicant has further stated that the said clarification was however, amended vide telex dated 30.09.1988 by virtue of which the requirement of plastic layer being ‘continuous’ was removed but the remaining portion of the clarification remained in force; that comprehensive reading of the tariff chapters as also the circular issued by the Board in this regard makes it amply clear that cotton fabric to be classifiable under Chapter Heading 5903 would have to satisfy the twin condition of being completely coated with plastic and of such coating making the fabric completely impervious; that in the case of the applicant, neither of the said conditions are satisfied inasmuch as the cotton fabrics are only partially coated and they remain to be pervious and porous even after such application; that other relevant aspect of the coating being too thin to be seen with the naked eye also confirms the view that the product of the applicant falls within the four corners of Chapter 52 and not Chapter 59; that Note 2(c) in the said Chapter stood deleted on 16.3.1995 and therefore, the very basis for changing the classification of the goods from Chapter 52 to 59 did not exist anymore; that moreover, circulars issued by the Board in and around bringing about such changes in the tariff also clearly expressed that such products were otherwise classifiable under Chapter 50 to 55 of the Tariff depending upon the constituent of the base fabrics; that it can be safely concluded that the product ‘fusible interlining fabrics of cotton’ manufactured by the applicant was more appropriately classifiable as ‘woven fabrics of cotton’ falling under Chapter 52 of the erstwhile Central Excise Tariff and this view is also supported by various judgements and decisions rendered by Hon’ble High Courts as also Appellate Tribunal in cases concerning the same goods.

12. The applicant has submitted that under the present GST regime, the Central Government has vide Notification No.1/2017-Central Tax(Rate) dated 28.06.2017 (hereinafter referred to as ‘the said notification’), notified different rates for all the goods by dividing them in 6 schedules; that Sr.No.211 to Schedule-I of the said notification covers goods in the nature of ‘woven fabrics of cotton’ falling under Chapter Heading 5208 and 5212 and is amenable to the tariff structure of 2.5%; that the Central Government in the said notification has by way of explanation (iii) and (iv) further clarified that the phrases “Tariff item’, sub-heading’, ‘heading’ and ‘Chapter’ used in the said notification shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 and that the rules for interpretation of the First Schedule to the Customs Tariff Act, 1975, including the Section and Chapter notes and the General Explanatory notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification; that therefore, reference to woven fabrics of cotton under Chapter Heading 5208 to 5212 in the schedule to the said notification is the same as provided under Chapter Heading 5208 to 5212 of the Customs Tariff; that the structure of the tariff under the erstwhile Central Excise Tariff as also the Customs Tariff are both based on and aligned with the internationally accepted common classification system popularly referred to and known as ‘Harmonized System of Nomenclature’; that a perusal of the Customs Tariff in respect of goods falling under Chapter 52 and 59 would show that the same is identical to Chapter 52 and 59 of the erstwhile Central Excise Tariff; that woven fabrics of cotton which were earlier classifiable under Chapter Heading 5208 to 5212 of the erstwhile Central Excise Tariff, are also covered under Chapter 5208 to 5212 of the Customs Tariff; that similarly the Note 2(c) which was the entire basis for changing the classification from Chapter 52 to 59 of the erstwhile Central Excise Tariff and which was subsequently deleted, also does not find any reference under the Customs Tariff Act; that keeping the aforesaid facts in mind, it is clear and evident that the scope and principle of classification as crystallised under the erstwhile Central Excise Tariff would be equally applicable to the classification of goods under the present Goods and Service Tax regime. The applicant has concluded his submission by stating that their product ‘Cotton fusible interlining fabrics’ were under the erstwhile Central Excise Tariff classifiable under Chapter 5208/5209 as ‘woven fabrics of cotton’ and even under the present regime, the said product would be classifiable as ‘woven fabrics of cotton’ and amenable to duty structure of 2.5% as provided for under Serial No.211 of Schedule-I of the said notification. The applicant has asked the following question seeking Advance Ruling on the same:

“Whether the product ‘Fusible Interlining Fabrics of Cotton’ is correctly classifiable under Chapter 52 or Chapter 59?”

DISCUSSION & FINDINGS:

13. We have considered the submissions made by the applicant in their application for advance ruling as well as the arguments/discussions made by their representative Shri Paritosh Gupta, Advocate at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant.

14. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to similar provisions of the GGST Act.

15. Based on the submission of the applicant as well as the arguments/discussions made by the representative of the applicant during the course of personal hearing, we find that the issue to be decided is whether the product ‘Fusible Interlining Fabrics of Cotton’ is correctly classifiable under Chapter 52 or Chapter 59. As per the submission of the applicant, the sequence of events that led the applicant to file the present application seeking Advance ruling on the above issue are as under:

(a) fusible interlining fabrics were initially classified under various chapters from chapter 50 to 55 of the tariff depending upon the nature of the fabrics under the erstwhile Central Excise regime.

(b) The Board had vide Circular dated 02.09.1988 clarified that fusible interlining cloth, to merit classification as coated fabrics under CETH 5903, should meet the following requirements:

(i) It should have a continuous and adherent film or layer of plastic on one side of the fabric surface.

(ii) The fabric should be impervious.

(iii)It should satisfy the conditions prescribed in Note 2 of Chapter 59.

(c) By virtue of amendment to the Central excise Tariff made vide Finance Act, 1989, Note 2(c) came to be introduced in Chapter 59 of the tariff to provide that fusible interlining cloth made by discrete coating of plastic by dot matrix process would be classified under Chapter Heading 5903 with effect from 01.03.1989. Also, another Circular No.5/89 dated 15.06.1989 was also issued by the Board around the same time, clarifying that new note was being introduced in Chapter 59 of the Tariff in order to include fusible interlining cloth made by discrete coating of plastic by dot matrix process in Chapter Heading 5903. The said note read as under:

“Textile fabrics, partially or discretely coated with plastic by dot printing process (heading no.59.03)”

(d) Thereafter, the said note was further modified w.e.f. 20.03.1990 to provide as under:

“Textile fabrics, partially or discretely coated with plastic (heading no.59.03)”

(e) By virtue of amendment brought about w.e.f. 16.03.1995, the said note came to be deleted and was removed from Chapter 59 of the Tariff.

(f) The Board vide Circular dated 27.11.1998 expressed that the omission of the note was neither intended to nor resulted in changing the classification of fusible interlining cloth under Heading 5903.

(g) Not being agreeable with the stand of the Department as conveyed vide the aforesaid circular, M/s. Madura Coats preferred a writ petition in the High Court of Madras being WP No.354 of 1999 wherein vide order and judgement dated 30.09.2003, the Hon’ble High Court of Madras held that a bare perusal of the tariff heading and notes in issue, it was clear that but for the Chapter Note 2(c), which was introduced under the Finance Act, 1989, such fusible interlining would be coming within Chapters 50 to 55 and only by virtue of introduction of Chapter Note 2(c) of Chapter 59, such fusible interlining came within the scope of Chapter 59.03 and once such Chapter Note 2(c) of Chapter 59 was omitted under the Finance Act, 1995, it is obvious that the position which was available prior to introduction of such Chapter Note (c) revived, that in such background, issuance of Circular would be clearly against the statutory provisions. The Hon’ble Court also noted that the circular was also against the provision of Section 37B of the Central Excise Act as the Board could not shut down the quasi-judicial power of the authorities and in view of the aforesaid finding, the Circular issued by the Board was held to be invalid and illegal.

(h) The said order of the Single Judge of the Madras High Court was challenged by the Department before the Division Bench of the Madras High Court under W.A.No.507 of 2005 wherein vide order and judgement dated 05.01.2009, the Hon’ble Division Bench of the Madras High Court dismissed the Writ Appeal and upheld the judgement of the Single Judge as regards the quashing of the circular in view of Section 37B of the Central Excise Act, however no opinion was rendered on the merit of the case and the assessing officer was directed to adjudicate the matter on its own merits.

(i) Upon adjudication of the case by the assessing authorities, the issue was held against M/s. Madura Coats pvt.ltd. which became a subject matter of appeal being Appeal No.E/31/2012-DB before the Appellate Tribunal, Chennai.

(j) The Appellate Tribunal, Chennai, by Order No.41941/2018 dated 19.06.2018 in the case of M/s. Madura Coats pvt.ltd. vs. Commissioner of Central Excise in Appeal No.E/31/2012 had held that the product ‘Fusible Interlining Fabrics of Cotton’ were not classifiable under Chapter 5903 but was correctly classifiable under Chapter 52 of the erstwhile Tariff stating that the very basis for changing the classification i.e. Note 2(c), which was introduced in Chapter 59, has thereafter been deleted w.e.f. 16.03.1995 and therefore, the position as existed prior to introduction of the said note would be restored;

(k) With effect from introduction of Note 2(c), the applicant was classifying their said goods under Chapter Heading 5903 like all other manufacturers of the said product and the said classification was retained by the applicant when transition was made from the erstwhile Central Excise legislation to the present Goods and Service Tax regime.

(l) The product manufactured by M/s. Madura Coats pvt.ltd. is identical to the goods manufactured by the applicant as also other manufacturers throughout the Country.

(m) Subsequent to the pronouncement of the said decision, many of the other manufacturers including M/s. Madura Coats pvt.ltd. have revised their classification from Chapter 59 to Chapter 52 of the present Tariff.

16. We have gone through the aforementioned order issued by the Appellate Tribunal, Chennai. It is found that the order dated 19.06.2018 is with regard to an appeal filed by M/s. Madura Coats pvt.ltd. against Order-in-Appeal No.330/2011 dated 17.10.2011 passed by the Commissioner of Central Excise(Appeals), Madurai i.e. it pertains to an issue of pre-GST regime. The issue involved in this case is that the appellant M/s. Madura Coats pvt.ltd. had originally classified their product ‘coated fusible interlining fabrics of cotton’ under Heading 5903 consequent to insertion of Note 2(c) in Chapter 59 of the Central Excise Tariff Act, 1985(CETA) w.e.f 01.03.1989. The said chapter note was omitted w.e.f 16.03.1995 following which the appellants sought reclassification under Heading 5207. After hearing both sides, the Appellate Tribunal came to the conclusion that since Chapter Note 2(c) itself is no longer in existence and the impugned goods otherwise did not satisfy the requirements in Chapter Note 2(a) read with CBEC Circulars, impugned goods will not get classified under CETH 5903. .

17. The purpose of classification is to ascertain the applicability of any entry, specifying the rate of tax or exemption from payment of tax and under the present regime of GST, the classification of products are based on the First Schedule to the Customs Tariff Act, 1975(51 of 1975). Explanation (iii) and (iv) to the Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 reads as under:

“(iii) “Tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification”.

Further, the Tariff Act is aligned to the Harmonised System of Nomenclature and it is a settled position of law that the reference to the Explanatory Notes to the HSN code is admissible for answering any question of classification.

18. To begin with, we will be required to refer to the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) for referring to Heading 5903. Heading 5903 appears in Chapter 59 of the said Tariff which reads as “Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use” and reads as under:

5903 TEXTILE FABRICS, IMPREGNATED, COATED,COVERED OR LAMINATED WITH PLASTICS, OTHER THAN THOSE OF HEADING 5902

5903 10 With polyvinyl chloride :

5903 10 10 Imitation leather fabrics of cotton

5903 10 90 Other

5903 20 With polyurethane :

5903 20 10 Imitation leather fabrics, of cotton

5903 20 90 Other

5903 90 Other:

5903 90 10 Of cotton

5903 90 20 Polyethylene laminated jute fabrics

5903 90 90 Other

19. Chapter Notes to Chapter 59 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) reads as under:

NOTES :

1. Except where the context otherwise requires, for the purposes of this Chapter, the expression “textile fabrics” applies only to the woven fabrics of Chapters 50 to 55 and headings 5803 and 5806, the braids and ornamental trimmings in the piece of heading 5808 and the knitted or crocheted fabrics of headings 6002 to 6006.

2. Heading 5903 applies to:

(a) textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square metre and whatever the nature of the plastic material (compact or cellular), other than:

(1) fabrics in which the impregnation, coating or covering cannot be seen with the naked eye (usually Chapters 50 to 55, 58 or 60); for the purpose of this provision, no account should be taken of any resulting change of colour;

(2) products which cannot, without fracturing, be bent manually around a cylinder of a diameter of 7 mm, at a temperature between 15oC and 30oC (usually Chapter 39);

(3) products in which the textile fabric is either completely embedded in plastics or entirely coated or covered on both sides with such material, provided that such coating or covering can be seen with the naked eye with no account being taken of any resulting change of colour (Chapter 39);

(4) fabrics partially coated or partially covered with plastics and bearing designs resulting from these treatments (usually Chapters 50 to 55, 58 or 60);

(5) plates, sheets or strip of cellular plastics, combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (Chapter 39); or

(6) textile products of heading 5811;

(b) fabrics made from yarn, strip or the like, impregnated, coated, covered or sheathed with plastics, of heading 5604.

3. For the purposes of heading 5905, the expression “textile wall coverings” applies to products in rolls, of a width of not less than 45 cm, suitable for wall or ceiling decoration, consisting of a textile surface which has been fixed on a backing or has been treated on the back (impregnated or coated to permit pasting).

This heading does not, however, apply to wall coverings consisting of textile flock or dust fixed directly on a backing of paper (heading 4814) or on a textile backing (generally heading 5907).

4. For the purposes of heading 5906, the expression “rubberised textile fabrics” means:

(a) textile fabrics impregnated, coated, covered or laminated with rubber:

(i) weighing not more than 1,500 g/m2; or

(ii) weighing more than 1,500 g/m2 and containing more than 50% by weight of textile material;

(b) fabrics made from yarn, strip or the like, impregnated, coated, covered or sheathed with rubber, of heading 5604; and

(c) fabrics composed of parallel textile yarns agglomerated with rubber, irrespective of their weight per square metre.

This heading does not, however, apply to plates, sheets or strip of cellular rubber combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (Chapter 40), or textile products of heading 5811.

5. Heading 5907 does not apply to:

(a) fabrics in which impregnation, coating or covering cannot be seen with the naked eye (usually Chapters 50 to 55, 58 or 60); for the purpose of this provision, no account should be taken of any resulting change of colour;

(b) fabrics painted with designs (other than painted canvas being theatrical scenery, studio backcloths or the like);

(c) fabrics partially covered with flock, dust, powdered cork or the like and bearing designs resulting from these treatments; however, imitation pile fabrics remain classified in this heading;

(d) fabrics finished with normal dressings having a basis of amylaceous or similar substances;

(e) wood veneered on a backing of textile fabrics (heading 4408);

(f) natural or artificial abrasive powder or grain, on a backing of textile fabrics (heading 6805);

(g) agglomerated or reconstituted mica, on a backing of textile fabrics (heading 6814); or

(h) metal foil on a backing of textile fabrics (generally Section XIV or XV).

6. Heading 5910 does not apply to:

(a) transmission or conveyor belting, of textile material, of a thickness of less than 3 mm; or

(b) transmission or conveyor belts or belting of textile fabric impregnated, coated, covered or laminated with rubber or made from textile yarn or cord impregnated, coated, covered or sheathed with rubber (heading 4010).

7. Heading 5911 applies to the following goods, which do not fall in any other heading of Section XI:

(a) textile products in the piece, cut to length or simply cut to rectangular (including square)

shape (other than those having the character of the products of headings 5908 to 5910), the following only:

(i) textile fabrics, felt and felt-lined woven fabrics, coated, covered or laminated with rubber,leather or other material, of a kind used for card clothing, and similar fabrics of a kind used for other technical purposes, including narrow fabrics made of velvet impregnated with rubber, for covering weaving spindles (weaving beams);

(ii) bolting cloth;

(iii) straining cloth of a kind used in oil presses or the like, of textile material or of human hair;

(iv) flat woven textile fabrics with multiple warp or weft, whether or not felted, impregnated or coated, of a kind used in machinery or for other technical purposes;

(v) textile fabrics reinforced with metal, of a kind used for technical purposes;

(vi) cords, braids and the like, whether or not coated, impregnated or reinforced with metal,of a kind used in industry as packing or lubricating materials;

(b) textile articles (other than those of headings 5908 to 5910) of a kind used for technical purposes [for example, textile fabrics and felts, endless or fitted with linking devices, of a kind used in paper making or similar machines (for example, for pulp or asbestos-cement), gaskets, washers, polishing discs and other machinery parts].

20. Explanatory notes to HSN in respect of Heading 5903 reads as under:

This heading covers textile fabrics which have been impregnated, coated, covered or laminated with plastics (e.g., poly(vinyl chloride)).

Such products are classified here whatever their weight per m2 and whatever the nature of the plastic component(compact or cellular), provided:

(i) That, in the case of impregnated, coated or covered fabrics, the impregnation, coating or covering can be seen with the naked eye otherwise than by a resulting change in colour.

Textile fabrics in which the impregnation, coating or covering cannot be seen with the naked eye or can be seen only by reason of a resulting change in colour usually fall in Chapters 50 to 55, 58 or 60. Examples of such fabrics are those impregnated with substances designed solely to render them crease-proof, moth­proof, unshrinkable or waterproof (e.g., waterproof gabardines and poplins), Textile fabrics partially coated or partially covered with plastics and bearing designs resulting from these treatments are also classified in Chapter 50 to 55, 58 or 60.

(2) That the products are not rigid, i.e. they can, without fracturing, be bent manually around a cylinder of a diameter of 7 mm, at a temperature between 15 degrees centigrade and 30 degrees centigrade.

(3) That the textile fabric is not completely embedded in, nor coated or covered on both sides with, plastics.

Products not meeting the requirements of subparagraph(2) or (3) above usually fall in Chapter 39. However, textile fabric coated or covered on both sides with plastics where the coating or covering cannot be seen with the baked eye, or can be seen only by reason of a resulting change in colour, usually falls in Chapter 50 to 55, 58 or 60. Except in the case of textile products of headijg 58.11, textile fabrics combined with plates, sheets or strip of cellular plastics, where the textile fabric is present merely for reinforcing purposes, are also classified in Chapter 39(see General Explanatory Note to Chapter 39, part entitled “Plastics and textile combinations”, penultimate paragraph).

The laminated fabrics of this heading should not be confused with fabrics which are simply assembled in layers by means of a plastic adhesive. These fabrics, which have no plastics showing in cross-section, generally fall in Chapter 50 to 55.

In many of the textile fabrics classified here, the plastic material, usually coloured, forms a surface layer which may be smooth or be embossed to simulate e.g. the grain of leather (“leathercloth”).

This heading also covers dipped fabrics (other than those of heading 59.02), impregnated to improve their adhesion to rubber, and textile fabrics which are spattered by spraying with visible particles of thermoplastic material and are capable of providing a bond to other fabrics or materials on the application of heat and pressure.

This heading also includes textile fabrics made from year, strip or the like, impregnated, coated, covered or sheathed with plastics, of heading 56.04.

The fabrics of this heading are used for a variety of purposes including furnishing materials, the manufacture of handbags and travel goods, garments, slippers, toys etc., in book binding, as adhesive tapes, in the manufacture of electrical equipment etc. This heading also excludes:

(a) Quilted textile products of heading 58.11

(b) Textile fabrics coated or covered with plastics for use as floor coverings (heading 59.04).

(c) Textile fabrics, impregnated or coated, having the character of wall coverings(heading 59.05).

(d) Textile fabrics, impregnated, coated, covered or laminated with plastics made up as described in Part(II) of the General Explanatory Note to Section XI.

21. We have thoroughly gone through the above and find that the dispute regarding classification of fusible interlining cloth, which is partially coated with plastic by the dot printing process i.e. whether it is covered under Chapter 52 to 55 or Chapter 59, has repeatedly come up before different authorities. In it’s Circular No.24/Coated Fabric/88-CX.1 dated 02.09.1988, CBEC has referred to the production process. The finished woven fabric passed over pre­heated rolls having a high surface temperature and the heated substance was then pressed to a printing roll having fine dots engraved on it. High-density polyethylene powder was taken in a hopper that sat on the engraved printing roll, filling the dots. As a result, the pre-heated fabric got printed with plastic dots. The powder in between the engraved dots was scrapped by a doctor blade provided in the hopper. The dot printed cloth then passed through a heated chamber where the plastic melted and fused with the piece of cloth. CBEC concluded that the fusible interlining merited classification under Heading 5903 if the above printing process covered one side of the fabric with a continuous and adherent film or layer of plastic that made the fabric impervious.

21.1 In Circular No.5/89 dated 15.06.1989, CBEC discussed the significance of the insertion of Chapter 2(c) in Chapter 59 by the Finance Act, 1959. After the insertion of the said note, the fusible interlining cloth made by discrete coating with plastic by dot printing process became classifiable under Heading 5903. CBEC clarified that before that, such cloth had been covered under Chapter 52 to 55, depending upon the textile materials used. Chapter Note 2 (c) was omitted w.e.f. 16.03.1995. CBEC vide Circular No.433/66/98-CX.6 dated 27.11.1998 tried to clear the air about the classification of fusible interlining cloth in the context of removal of Chapter Note 2(c) from Chapter and drew attention to the Finance Act, 1995 that broadly aligned the Central Excise Tariff to the Tariff Act. The significance of the alignment was that the Explanatory Notes to the HSN code or the Chapter Notes to Chapter 59 of the Tariff Act had not contained any provision like Chapter Note 2(c) to Chapter 59 of the Central Excise Tariff Act, 1985. The said Chapter Note 2(c) was, therefore, deleted by the Finance Act, 1995. CBEC however maintained that fusible interlining cloth partially coated with plastic would continue to be classified under Heading 5903 by issuing Circular No.433/66/98-CX.6 dated 27.11.1998. This Circular differs from Circular No.5/89 dated 15.06.1989. The difference arises from the application of the provisions of the explanatory notes to the HSN Code. In the said explanatory notes to Chapter 59, textile fabrics which were spattered by spraying with visible particles of thermoplastic material and were capable of providing a bond to other fabrics or materials on the application of heat and pressure were classifiable under Heading 5903. According to Circular No.433/66/98-CX.6 dated 27.11.1998, such classification should be treated as an exception to Chapter Note 2(a)(4) to Chapter 59.

21.2 The Appellate Authority for Advance Ruling, West Bengal in order dated 19.03.2020 in the case of Appeal Case No. 15/WBAAAR/APPEAL/2019 dated 26/09/2019 filed by M/s. Sadguru Seva Paridhan pvt.ltd. stated as under in respect of Circular No.433/66/98-CX.6 dated 27.11.1998 in Para-3(v) to (vii) of the said order:

“(v) While striking down the above mentioned Circular No. 433/66/98-CX-6 dated 27/11/1998 as ultra vires and contrary to Section 37B of the Central Excise Act, 1944, the Ld. Single Bench of Madras High Court in the case of Madura coats reported in 2004(163) ELT 164(Mad.), took no notice of the applicability of the Explanatory Notes to the HSN Code in deciding a classification issue under the Excise Tariff. Although not stated explicitly, the court held the interpretation of the law, as made in Circular No. 5/89 dated 15/06/1989, a binding legal provision, and the contrary view is illegal and ultra vires.

(vi) Upon appeal, the division Bench of the Madras High Court, in its order dated 05/01/2009 in WA No. 507 of 2005, refrained from expressing any view on the legality of the said Circular so that the assessing officer could apply his judgment without any bias. The court however, set aside the impugned Circular that the assessing officer had quoted in a show cause notice in violation of the provisions of Section 37B of the CEA’44. Such setting aside of the impugned Circular restored the SCN. The Division Bench however, categorically stated that it was not done on the ground that the circular is ultra vires.

(vii) It therefore, appears that reference to the Single Bench judgment in the above mentioned case does not help in deciding the classification of the applicant’s. The fact that CBEC appealed against the Single Bench judgment in 2005 also indicates that it continues defending Circular No. 433/66/98-CX-6 dated 27/11/1998 and has not made any further course correction. Circular No. 433/66/98-CX-6 dated 27/11/1998, therefore, reflects CBEC’s view on the classification of fusible interlining cloth as on date.”

21.3 In view of the above, we find that CBEC Circular No. 433/66/98-CX-6 dated 27/11/1998 is relevant even today and has persuasive value. Further, Chapter Note 2(a)(4) to Chapter 59 says that fabrics partially coated or partially covered with plastics and bearing designs resulting from these treatments are excluded from Heading 5903 and are usually covered in Chapter 50 to 55, 58 or 60, depending on the materials used. At the same time, according to the Explanatory notes to the HSN code, textile fabrics which are spattered by spraying with visible particles of thermoplastic material and are capable of providing a bond to other fabrics or materials on the application of heat and pressure are classifiable under heading 5903. Also, the process of manufacture of the fusible interlining of fabrics of cotton as submitted by the applicant appears to be similar to the one mentioned hereinabove. Further, according to Circular No.433/66/98-CX-6 dated 27/11/1998, such classification should be treated as an exception to Chapter Note 2(a)(4) to Chapter 59. It is also seen that the applicant has, nowhere in their application or in their written or oral submissions, taken the view that Circular No.433/66/98-CX-6 dated 27/11/1998 has erred in treating fusible interlining cloth as a category of textile fabric that is spattered by spraying with visible particles of thermoplastic material and is capable of providing a bond to other fabrics or materials on the application of heat and pressure. In the absence of any such submission, it is reasonable to agree with the views expressed by CBEC in Circular No. 433/66/98-CX-6 dated 27/11/1998 that fusible interlining cloth is classifiable under Heading 5903. In view of the above, we find that the product ‘fusible interlining fabric of cotton’ of the applicant would be classifiable under Heading 5903 only.

22. Further, we would also like to draw attention to the explanatory notes to HSN (with respect to Heading 59.03) (as narrated in para-14 above) that products fulfilling the conditions (1) to (3) mentioned therein would be covered under the Heading 59.03. In this context, the applicant has got a sample of fabric of ‘Fusible interlining Cotton’ tested from Ahmedabad Textile Industry’s Research Association (ATIRA) and has submitted a copy of the test report dated 02.08.2018. As per data available online, we find that Ahmedabad Textile Industry’s Research Association (commonly known as ATIRA) is an autonomous non-profit association for textile research located in Ahmedabad and is the largest association for textile research & allied industries in India which was established on 13 December 1947 and was recognized by the Council of Scientific and Industrial Research under the Ministry of Science and Technology, Government of India. In view of the above, we are of the opinion that we can rely upon the test results issued by ATIRA vide their report dated 02.08.2018. The test results are as follows:

1. The product contains 85% and more cotton.

2. The product is polymer coated on one side. Coating cannot be seen with the naked eye. Coating is non-continuous. This coating is different than film coating. Film coating is visible with naked eye.

3. The product can be bent without fracturing around a cylinder of a diameter 7m or more at temperature between 15C to 30C.

4. The fabric is not completely embedded in plastic.

5. Product is coated on one side only.

6. The product is covered with plastic polymer on one side and bears a design like a dot matrix design resulting from coating process.

7. The fabric is porous and pervious.

The product is cotton fusible interlining.

23. In view of the above, we find it necessary to compare the three conditions envisaged in the explanatory notes to the HSN to that of the aforementioned test results in respect of the product ‘Fusible interlining fabric of cotton’ of the applicant. Fulfillment of all the 3 conditions means that the said product would be classifiable under Heading 5903. The same is as under:

Sr. No. Conditions to be fulfilled as per explanatory notes to HSN Corresponding test results as per ATIRA’s test report
1. In the case of impregnated, coated or covered fabrics, the impregnation, coating or covering can be seen with the naked eye otherwise than by a resulting change in colour. The product is polymer coated on one side. Coating cannot be seen with the naked eye. Coating is non-continuous. This coating is different than film coating. Film coating is visible with naked eye.
2. The products are not rigid, i.e. they can, without fracturing, be bent manually around a cylinder of a diameter of 7 mm, at a temperature between 15 degrees centigrade and 30 degrees centigrade. The product can be bent without fracturing around a cylinder of a diameter 7m or more at temperature between 15C to 30C.
3. The textile fabric is not completely embedded in, nor coated or covered on both sides with, plastics. The fabric is not completely embedded in plastic. It is covered with plastic polymer on one side and bears a design like a dot matrix design resulting from coating process.

Condition 1: states that impregnation, coating or covering must be seen with the naked eye. As per the test results, polymer coating cannot be seen with the naked eye but film coating is visible with the naked eye. We find that film coating also involves coating with natural or synthetic polymeric substance (plastic). Even otherwise, the condition only stipulates that coating must be visible with the naked eye but does not mention polymer coating or film coating, hence this condition is fulfilled.

Condition 2: is fulfilled as the product can be bent without fracturing around a cylinder of a diameter 7m or more at temperature between 15 degrees C to 30 degrees C.

Condition 3: is fulfilled as the fabric is not completely embedded in plastic but is covered with plastic polymer on one side and bears a design like a dot matrix design resulting from coating process.

In view of the above, since all the 3 conditions as specified in the explanatory notes to HSN in respect of Heading 5903 have been fulfilled as per the above test results submitted by the applicant, we can safely conclude that the ‘fusible interlining of fabric’ manufactured and supplied by the applicant is rightly classifiable under Heading 5903 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975).

24. Although we have decided the classification of fusible interlining fabrics of cotton manufactured by the applicant, we feel the need to refer to the relevant headings of Chapter 52 of the First Schedule of the Customs Tariff Act, 1975(51 of 1975) also, since, the applicant is of the view that the subject goods should be classifiable under Chapter 52 of the said Tariff Act. Since headings 5201 to 5207 of the said Chapter covers cotton yarns, we will be referring to Headings 5208 to 5212 of the said Chapter which covers fabrics. The same reads as under:

5208 WOVEN FABRICS OF COTTON, CONTAINING 85% OR MORE BY WEIGHT OF COTTON, WEIGHING NOT MORE THAN 200 G/M2

– Unbleached :

5208 11 — Plain weave, weighing not more than 100 g/m2 :
5208 12 — Plain weave, weighing more than 100 g/m2:
5208 13 — 3-thread or 4-thread twill, including cross twill :
5208 19 — Other fabrics :

Bleached :

5208 21 — Plain weave, weighing not more than 100 g/m2:
5208 22 — Plain weave, weighing more than 100 g/m2:
5208 23 — 3-thread or 4-thread twill, including cross twill :
5208 29 — Other fabrics :

– Dyed :

5208 31 — Plain weave, weighing not more than 100 g/m2:
5208 32 — Plain weave, weighing more than 100 g/m2:
5208 33 — 3-thread or 4- thread twill, including cross twill :
5208 39 — Other fabrics :

5208 41 — Plain weave, weighing not more than 100 g/m2:
5208 42 — Plain weave, weighing more than 100 g/m2:
5208 43 — 3-thread or 4- thread twill, including cross twill :
5208 49 — Other fabrics :

– Printed :

5208 51 — Plain weave, weighing not more than 100 g/m2 :
5208 52 — Plain weave, weighing more than 100 g/m2 :
5208 59 — Other fabrics :

5209 WOVEN FABRICS OF COTTON, CONTAINING 85%OR MORE BY WEIGHT OF COTTON, WEIGHING MORE THAN 200 G/M2

– Unbleached :

5209 11 — Plain weave :

5209 12 — 3-thread or 4-thread twill, including cross twill :

5209 19 00 — Other fabrics

– Bleached :

5209 21 — Plain weave :

5209 22 — 3-thread or 4-thread twill, including cross twill :

5209 29 — Other fabrics :

5209 31 — Plain weave :

5209 32 — 3-thread or 4-thread twill, including cross twill :

5209 39 — Other fabrics :

5209 41 — Plain weave :

5209 42 00 — Denim

5209 43 — Other fabrics of 3-thread or 4-thread twill, including cross twill :

5209 49 — Other fabrics :

5209 51 — Plain weave Lungis

5209 52 — 3-thread or 4-thread twill, including cross twill :

5209 59 — Other fabrics :

5210 WOVEN FABRICS OF COTTON, CONTAINING LESS THAN 85% BY WEIGHT OF COTTON, MIXED MAINLY OR SOLELY WITH MAN-MADE FIBRES, WEIGHING NOT MORE THAN 200 G/M2

– Unbleached :

5210 11 — Plain weave :

5210 19 00 — Other fabrics m2

– Bleached :

5210 21 — Plain weave :

— Other :

5210 29 — Other fabrics :

– Dyed :

5210 31 — Plain weave :

5210 32 — 3-thread or 4-thread twill, including cross twill :

5210 39 — Other fabrics :

– Of yarns of different colours :

5210 41 — Plain weave :

5210 49 — Other fabrics :

– Printed :

5210 51 — Plain weave :

5210 59 — Other fabrics :

5211 WOVEN FABRICS OF COTTON, CONTAINING LESS THAN 85% BY WEIGHT OF COTTON, MIXED MAINLY OR SOLELY WITH MAN-MADE FIBRES, WEIGHING MORE THAN 200 G/M2

– Unbleached :

5211 11 — Plain weave :

5211 12 — 3-thread or 4-thread twill, including cross twill :

5211 19 00 — Other fabrics m2

5211 20 — Bleached :

– Dyed:

5211 31 — Plain weave :

5211 32 — 3-thread or 4-thread twill, including cross twill :
5211 39 — Other fabrics :

– Of yarns of different colours :

5211 41 — Plain weave :

5211 42 00 — Denim m2 10% or Rs. 18 per sq. m. -whichever is higher

5211 43 — Other fabrics of 3-thread or 4-thread twill, including cross twill :

5211 49 — Other fabrics :

– Printed :

5211 51 — Plain weave :

5211 52 — 3-thread or 4-thread twill, including cross twill :

5211 59 — Other fabrics :

5212 OTHER WOVEN FABRICS OF COTTON
– Weighing not more than 200 g/m2 :

– Weighing not more than 200 g/m2 :

5212 11 00 — Unbleached

5212 12 00 — Bleached

5212 13 00 — Dyed

5212 14 00 — Of yarns of different colours

5212 15 00 — Printed

– Weighing more than 200 g/m2 :

5212 21 00 — Unbleached m2

5212 22 00 — Bleached m2

5212 23 00 — Dyed

5212 24 00 — Of yarns of different colours

5212 25 00 — Printed

24.1 Chapter notes of Chapter 52 read as under:

SUBHEADING NOTE:

For the purposes of sub-headings 5209 42 and 5211 42, the expression “denim” means fabrics of yarns of different colours, of 3 – thread or 4 – thread twill, including broken twill, warp faced, the warp yarns of which are of one and the same colour and the weft yarns of which are unbleached, bleached, dyed, grey or coloured a lighter shade of the colour of the warp yarns.

24.2 Explanatory notes to HSN with respect to Headings 5208 and 5209 read as under:

Cotton fabrics are produced in great variety and are used, according to their characteristics, for making clothing, household linen, bedspreads, curtains, other furnishing articles etc.

The heading does not include:

(a) Bandages, medicated or put up for retail sale (heading 30.05)

(b) Fabrics of heading 58.01.

(c) Terry toweling and similar terry fabrics(heading 58.02).

(d) Gauze(heading 58.03).

(e) Woven fabrics for technical uses of heading 59.11.

24.3 Explanatory notes to HSN with respect to Headings 5210 and 5211 read as under:

This heading covers woven fabrics as defined in Part(I)(C)of the General Explanatory Note to Section XI. It covers these fabrics provided they are classified as cotton fabrics by the application of Note 2 to Section XI (see also Part (I)(A) of the General Explanatory Notes to Section XI) and provided they meet the following specification:

(a) Contain less than 85% by weight of cotton.

(b) Are mixed mainly or solely with man-made fabrics.

(c) Weigh not more than 200 g/m

The heading does not include:

(a) Bandages, medicated or put up for retail sale (heading 30.05)

(b) Fabrics of heading 58.01.

(c) Terry toweling and similar terry fabrics(heading 58.02).

(d) Gauze(heading 58.03).

(e) Woven fabrics for technical uses of heading 59.11.

24.4 Explanatory notes to HSN with respect to Headings 5212 reads as under:

This heading covers woven fabrics (as defined in Part(I)(C)of the General Explanatory Note to Section XI) made of cotton yarns. However, it should be noted that it covers only mixed woven fabrics, other than those of the preceding headings of this Chapter or specified or included in the second part of this Section (Chapter 58 or 59, usually).

Bandages, medicated or put up for retail sale, are excluded (heading 30.05).

24.5 On going through the aforementioned headings, chapter note of Chapter 52 as well as the explanatory notes to HSN with respect of the headings 5208 to 5212, we find that it does not cover laminated fabrics or fabrics coated with plastics. Hence, it can be safely concluded that ‘Fusible Interlining fabrics of cotton’ will not be covered under Chapter 52 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975).

25. Having decided the classification of the product ‘Fusible interlining fabrics of cotton’ of the applicant, we would also like to rely on a few judgements which support our view. The same are mentioned hereunder:

(1) Order No. 33/WBAAR/2019-20 dated 11.11.2019 issued by the West Bengal Advance Ruling Authority in respect of M/s. Sadguru Seva Paridhan Pvt Ltd. wherein it was held that fusible interlining fabric of cotton is classifiable under Heading 5903 in Chapter 59 of the First Schedule to the Customs Tariff Act, 1975.

(2) Order No.11/2019-20 dated 12.03.2020 issued by the Uttarakhand State Advance Ruling Authority in respect of M/s. The Ruby Mills ltd. wherein it was held that fusible interlining fabric of cotton is classifiable under Heading 5903 of the GST Tariff Act, 2017.

(3) Order dated 19.03.2020 of the Appellate Authority for Advance Ruling, West Bengal in the case of Appeal Case No. 15/WBAAAR/APPEAL/2019 filed by M/s. Sadguru Seva Paridhan pvt.ltd. wherein the Order No. 33/WBAAR/2019-20 dated 11.11.2019 issued by the West Bengal Advance Ruling Authority was upheld.

26. In light of the foregoing, we rule, as under –

RULING

Question: Whether the product ‘Fusible Interlining Fabrics of Cotton’ is correctly classifiable under Chapter 52 or Chapter 59?”

Answer: The product ‘Fusible Interlining Fabrics of Cotton’ of the applicant M/s Girish Rathod(Jay Ambey), Ahmedabad is correctly classifiable under Heading 5903 of Chapter 59 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975).

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