2010(04)LCX0186
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, SOUTH ZONAL BENCH AT CHENNAI
Jyoti Balasundaram, Vice President and Chittaranjan Satapathy, Member (Technical)
Sohams Foundation Engineering Pvt. Ltd.
Versus
Commissioner of Customs, Chennai
Final Order No. 443/2010, dated 19-4-2010 in Appeal No. C/275/2007
Advocated By -
S. Murugappan, Adv. For The Appellant
Indira Sisupal, JDR For The Respondent
ORDER
Jyoti Balasundaram, Vice President
1. The Appellants herein imported "Nylon Flodrain FD5" in running length from Malaysia under the bill of entry dated, 9th November, 2006. On first check, it was observed that the goods would not fall under CTH 59119090 as claimed by the importers. Pending test report from the Textile Committee, the goods were assessed under the abovementioned heading. The Textile. Committee opined that the outer material was of "non-woven textiles-polyester" 100 per cent and inner material was of Polyolefin 100 per cent and the material as a whole could be considered as "non-woven textiles" (Geotextiles). Based on this report, the goods were assessed under CTH 39173290 and duty was levied thereon which was paid by the Assessees "under protest" on 27th November, 2006. The Commissioner (Appeals) upheld the classification under Chapter 39; however, he held that the goods could not be considered either as tubes, or pipes or hoses in order to be classifiable under CTH 39173290, but were articles of "Polyolefin" classified under CTH 39269080. Hence, this appeal.
2. We have heard both sides. The leaflets produced by the Appellants indicate as under
Nylex PVD consist of one "drain body" a unique high density polyethylene running to the 30.
Nylex PVD consist of one drain body "a unique high density" the Mebradrain is a prefabricated strip drain consisting of a polypropylene core extruded into a highly flexible configuration and designed to transmit maximum water flow on both sides of the core. The core is wrapped with a strong and durable non-woven polypropylene filter fabric selected for its excellent filtration properties. The filter jacket has an important function. It consists of a strong, durable non-woven polypropylene Typar geotextile. The jacket serves as filter to allow passage of ground water into the drain core while eliminating movement of soil particles and preventing clogging of the filter. It is desirable to have a filter that will prevent piping but at the same time is highly permeable. The structure of Mebradrain meets these criteria. When compressible subsoil contains horizontal layers of permeable soil, pressurised pore water will find these layers and follow this path to the nearest drain. In order to make positive use of these permeable layers, the drain's filter permeability must at least equal these permeable layers. Since the Mebadrain filter has a greater relative permeability than most soil types, effective drainage in layered soils is assured.
3. The very name "Nylex Flodrain FD5", admittedly shows that the item is a drain body. The leaflets describe what a wick drain is and how it works, as under:
Wick drains, also called Prefabricated Vertical Drains (PVDs) are a " two piece drainage material consisting of an inner polypropylene core, extruded into a highly flexible configuration with channels designed to transmit the maximum water flow even when distorted under significant settlements or pressures. The outer spun-bounded polypropylene filter fabric of the wick drain is selected for its excellent ,strength and filtration properties to retain the soil while allowing the ground water to pass.
When an embankment or structure is built upon a site that has never before been compressed by the increased weights, the soil has to be realigned into a tighter "packing". In order to do this, the soil must get rid of water that occupies the gaps in the soil particles. In many silts and clays, the rate that water travels is so slow that it could take many years before the soils have expelled enough water to realign so that the particles carry the weight of the new construction. By installing wick drains in a designed pattern, the distance that the water must travel to escape the pressure is reduced to a couple of feet and reduces the travel time of water to weeks or months. Soil stabilisation using vertical wick drains is applied in areas with compressible and water saturated soils such as clay and silty clays. To expedite the consolidation process, it is necessary to shorten the flow path of pore water from the soil. This can be achieved by installing evenly spaced wick drains to the depth of the compressible layer. The pressurised pore water flows in a horizontal direction towards the nearest drains and escapes freely. With the aid of these drains the consolidation period can be significantly reduced, and can usually be achieved within the construction period. Geotextiles are permeable fabrics which, when used in association with soil, have the ability to separate, filter reinforce, protect, or drain. As the use of geotextile fabrics has expanded there has been the introduction of geotextile composites and the development of products such as geogrids and meshes. Overall these materials are referred to as Geo synthetics. Nylex PVD has been supplied to projects such as construction of roads, highways and expressways, treatment of ex-mining areas, contained yards and harbour construction, land reclamation for the construction of airport runway, construction of tank farms, commercial development in ex-agriculture land etc.
4 From the above, it is clear that the function of the goods is to through plastic material and to filter fine soil particles from entering the drain system to avoid clogging, which is achieved by polyester material.
5. The Textile Committee's report dated, 23rd November, 2006 is as under
The outer material was of "non-woven textiles" polyester 100 per cent and inner material was of Polyolefin 100 per cent and that the material as a whole could be considered as non-woven textiles (Geo-textiles).
The Textile Committee issued supplementary test report which subsequent! showed that the plastic material predominated by weight 68.60 percent while the polyester content was only 31.40 per cent. Going by the functional: characteristics also, we note that the main function is to "drain", which is performed by the plastic material.
6 The Appellant's claim classification under CTH 59119090 which covers textile products and articles for technical uses, specified in note 7 to this chapter. Note 7 of Chapter 59 states that Heading 5911 applies to 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 the 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.
7.The item imported cannot be fitted into any of the specifications mentioned therein. Sub-clause (a) specifies the goods as pieces cut to length or simply cut to rectangular, including square shape. However, the item is presented, in the form of rolls and, therefore, cannot be categorised as pieces cut to length or shape. As regards Sub-clause (b) the HSN Explanatory Notes to Chapter 5911 are relevant, the Note reads as under:
(B) Textile articles of a kind used for technical purposes (other than those of Headings 59.08 to 59.10) are classified in this heading and not elsewhere in Section XI (see Note 7 (b) to the Chapter); for example:
1 Any of the fabrics of (A) above which have been made up (cut to shape, assembled by sewing, etc.) for example, straining cloths for oil presses made by assembly of several pieces of fabrics; bolting cloth cut to shape and trimmed with tapes or furnished with metal eyelets or cloth mounted on a frame for use in screen printing.
2.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)(excluding machinery belts of Heading 59.10).
3. Articles formed of linked monofilament yarn spirals and having similar uses to the textile fabrics and felts of a kind used in paper- making or similar fabrics referred to in (2) above.
4. Gaskets and diaphragms for pumps, motors, etc., and was hers " (excluding those of Heading 84.84).
5. Discs, sleeves and pads for shoe polishing and other machines.
6.Textile bags for oil presses.
7. Cords cut to length, with knots, loops or metal or glass eyelets, for use on Jacquard or other looms.
8. Loom pickers.
9. Bags for vacuum cleaners, filter bags for air filtration plant, oil filters for engines, etc.
8. The imported item is not textiles used for technical purposes so as to qualify for classification under CTH 5911 and therefore, even though the goods are called "geotextiles" or "geosynthetics" in trade parlance, they do not merit classification under the category of textiles under CTH 5911.Furthermore, the goods consist of two materials, namely, "textiles" and "plastics", and the plastic material predominates and hence classification under CTH 59119090 is ruled out.
9. Having ruled out classification under Chapter 59, we have to see where the goods are to be classified. The General rules for Interpretation require to be applied as the item in dispute consists of two materials "textiles" as well as "plastics". In terms of Rule 2(b) of the Interpretative Rules, classification of goods consisting of more than one material or substance shall be made according to the principles laid down under Rule 3 which reads as under;
3. When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
(c) . When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
10. Rule 3(a) is not applicable as no heading provides for the more specific description of the goods and hence Rule 3(b) is attracted. The plastic material gives the goods their essential character, on the basis of the Textile Committee report as well as the samples of the item and further the predominant function of draining is achieved by the Polyolefin material; ' and the secondary function of filtering is achieved by the textile material Therefore, on application of Rule 3(b) of the General Interpretative Rules the item is classifiable under Chapter 39. However, CTH 3917 is not appropriate in view of the fact that the goods cannot be regarded as tubes, pipes hoses, which as per S. No. 8 of the Notes to Chapter 39 covers "hollow products", whether semi-manufactures or finished products, of a kind generally used for conveying, conducting or distributing gases or liquid: (for example, ribbed garden hose, perforated tubes). This expression also includes sausage casings and other lay-flat tubing. However, except for: the last-mentioned, those having an internal cross-section other than round, oval, rectangular (in which the length does not exceed 1.5 times tin width) or in the shape of a regular polygon are not to be regarded as tubes pipes and hoses but as profile shapes.
11. The "drain body" consists of a flat plastic, both sides of which have solid "principles" of the same material, evenly spread in symmetric rows and column, thus providing for gaps in between to permit the flow Of liquids and the "drain body" does not have an internal cross-section which is either round or in the shape of a regular polygon. The goods are more appropriately classifiable under the residuary Heading 39269080 covering articles of Polypropylene which is nothing but "Polyolefin". (The Hawley's condensed chemical dictionary defines "Polyolefin" as a class or group name for thermoplastic polymers derived from simple olefins among the more important are "polyethylene, polypropylene, polybutanes").
12. In the light of the above discussion, we uphold the impugned order classifying the goods under CTH 39269080 and reject the appeal.
Equivalent 2010 (180) ECR 0058 (Tri.-Chennai)
Equivalent 2010 (258) ELT 0383 (Tri. - Chennai)