I am directed to say that doubts have been expressed regarding correct classification of PVC leather cloth also known as Rexine Cloth as to whether it will fall under Heading No. 39.21 or 59.03 of the Central Excise Tariff. Attention has been drawn to Section Note 1(d) of Section XI of Central Excise Tariff, Chapter Note 2(a)(5) of Chapter 59 and Chapter note 2(k) of Chapter 39.
2. The process of manufacture of PVC leather cloth involves coating of a paste of plastic material (PVC) on one side of the base fabric. In this case the plastic is not combined with the textile but is coated on textile fabric to from final product. Textile fabric does not act as reinforcing material. Such fabrics are used fir upholstery and can take sharp bends without cracking.
3. As per Chapter Note 2(a) of chapter 59 of the Central Excise Tariff, Heading 59.03 applies to Textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per sq mtr. and whatever the nature of plastic materials other than the following:-
(ii) Products which cannot, without fracturing be bent manually around a cylinder of a diameter of 7 mm at a temperature between 15 degree C and 30 degree C (Usually Ch. 39):
(iii) Products in which the textile fabric is either completely embedded in plastics or entirely coated or covered on both sides with such material .............. (Chapter 39).
(v) Plates, sheets or strips of Cellular Plastics, combined with textile fabrics where textile material is present merely for reinforcing purpose (Chapter 39).
5. Section Note 1(d) of Section XI excludes fabrics impregnated, coated or laminated with plastics of Chapter 39 from the purview of Section XI. Similarly Chapter Note 2(k) under Chapter 39 of the CET excludes Textiles and Textile Materials from purview of Chapter 39. both these notes read in conjunction do not provide any basis for rejecting classification of Rexine Cloth either under Chapter 39 or under Textile Articles.
6. HSN contains expanded meaning of items covered under Heading 39.21. It covers plates, sheets, film, foil and strip of cellular plastics or those which have been, reinforced, laminated, supported or similarly combined. Rexine Cloth does not meet any of the criterion and does not appear to be covered by heading 39.21.
7. In contrast, the detailed notes on Page 816 of the HSN Explanatory Notes clearly amplify that leather cloth is covered by Heading 59.03. The relevant Extracts are :-
" The fabrics of this heading are used for a variety of purposes including furnishing materials, the manufacture of hand bags and travel goods, garments, slippers, toys etc. in book binding, as adhesive tapes, in the manufacture of electrical equipment etc".
9. The Board has also taken note of the decision of the Supreme Court in the case of M/s. Fenoplast (P) Ltd., reported in 1994 (72) ELT 513 (S.C.) wherein the Supreme Court has ordered the classification of coated cotton fabrics (Popularly known as rexine cloth) under item 19-III of the erstwhile Central Excise Tariff which corresponds to heading 59.03 of the new Central Excise Tariff Act, 1985.
10. Therefore, keeping in view the Chapter notes HSN notes, the decision of the Conference of Commissioners held at Madras and the judgment of the Supreme Court it is clarified the PVC leather cloth also known as rexine cloth will be appropriately classifiable under Heading No. 59.03 of the Central Excise Tariff Act, 1985.
11. Trade and Field formations may be advised accordingly.
pending disputes/ assessments may be finalised in view of the above guidelines.