Page 137 - GSTL_23rd July 2020_Vol 38_Part 4

2020 ] IN RE : SADGURU SEVA PARIDHAN PVT. LTD. 503
(g) Classification of a product can never be decided by merely referring
to circulars issued by revenue from time to time and without con-
sidering the terms of the applicable tariff.
(h) The applicant’s stand is duly supported by Rules 2(b) and 3 of the
General Rules for the Interpretation of the Schedule, as applicable to
the Tariff Act.
5. During the course of hearing the Appellant reiterated their submis-
sions. The Advocate appearing on behalf of the appellant reiterated their
grounds of appeal. He argued that the product namely fusible interlining cloth
merits classification under sub-heading 5208 and not under sub-heading 5903, as
done by the department. They have submitted a few samples of the invoices be-
ing issued by them at present, which according to them, clearly indicates that the
appellants are classifying the item under sub-heading 5208 of the Customs Tariff.
6. The concerned officer from the Revenue pointed out that the test re-
port does not describe the sample as a ‘fusible article’. The judgment in the mat-
ter of Madura Coats v. CBEC referred to by the Appellant is thus not applicable in
the present context. Further the reference of Goodswear Fashion Pvt. Ltd. is not ap-
plicable in the instant case as the judgment dealt with polyester viscose which is
quite different from the goods manufactured by the Appellant.
7. The matter is examined and submissions made before us are consid-
ered.
8. The product manufactured by the appellant is fusible interlining
cloth. Before 1989, the item used to be classified under Chapters 52 to 55, as clari-
fied under Circular No. 5/89, dated 15-6-1989. In the Union Budget of 1989-90, a
new Chapter Note 2(c) was introduced in Chapter 59 of the Tariff, which led to
inclusion of textile fabrics, partially or discretely coaled with plastic by dot print-
ing process under Heading 5903. Subsequently, in the Union Budget of 1995, the
said Chapter Note 2(c) was omitted with effect from 16-3-1995. It is the claim of
the appellant that after removal of the said chapter note, the item cannot be clas-
sified under Heading 5903. In their support, the appellant has submitted a few
decisions of High Court and a decision of AAR, Uttarakhand.
9. The sample copies of invoices issued by the appellant indicate that it
is classifying the product under sub-beading 5208. The product description un-
der sub-heading 5208 is as follows :
“5208 woven fabrics of cotton, containing 85% or more by weight of cot-
ton, weighing not more than 200 G/M 2 ”
The above description clearly indicates that for a product to be classified under
the above sub-heading, it has to be a woven fabric of cotton. Woven fabric is any
textile formed by weaving or interlacing two or more threads at right angles to
one another. We have examined the sample of the fusible interlining cloth placed
before us. It is seen that the product is textile coated with plastic on one of its
sides. It is evident from the sample as well as the dot printing process of manu-
facture as elaborated in Circular No. 24/Coated Fabric/88-Cx.1, dated 2-9-1988
of CBEC that no process of weaving or interlacing is involved in manufacture of
the item. Whereas the process of weaving gives rise to a fabric, the dot printing
process starts with a finished woven fabric. Thus, evidently fusible interlining
cloth manufactured through dot printing process cannot be classified under sub-
beading 5208 which contains only woven fabrics of cotton.

GST LAW TIMES  23rd July 2020  137