Government of India
Ministry of Finance
Department of Revenue
New Delhi the, June 29th 2010
Circular No. 929 / 19 /2010-CX
Order under section 37 B of Central Excise Act, 1944.
Subject :- Classification of Polyester Staple Fibre manufactured out of PET
scrap and waste bottles.
In exercise of powers conferred under section 37B of the Central Excise Act,
1944 Central Board of Excise & Customs considers it necessary, for the purposes
of uniformity with respect to classification of “Polyester Staple Fibre”
manufactured out of PET scrap and waste bottles, to issue the following
instructions.
- It has been brought to the notice of the Board that divergent practices are
being adopted in respect of classification of the “Polyester Staple Fibre”
manufactured out of PET scrap and waste bottles. Whereas in some jurisdictions
the said product has been classified under the Chapter 39 as article of plastic,
in other jurisdictions the same has been classified under Chapter Heading
55032000.
- The matter has been examined. Polyester is "Long-chain polymers chemically
composed of at least 85 percent by weight of an ester and a dihydric alcohol and
a terephthalic acid." Federal Trade Commission defines Polyester Fibre: A
manufactured fibre in which the fibre forming substance is any long-chain
synthetic polymer composed of at least 85% by weight of an ester of a
substituted aromatic carboxylic acid, including but not restricted to
substituted terephthalic units, p(-R-O-CO- C6H4-CO-O-)x and parasubstituted
hydroxy-benzoate units, p(-R-O-CO-C6H4-O-)x.
- Normally PSF is manufactured by using main inputs like PTA & MEG. The name
"polyester" refers to the linkage of several monomers (esters) within the fiber.
Esters are formed when alcohol reacts with a carboxylic acid. The monomer ester
then is polymerized under suitable conditions to obtain polyester.
- The most common polyester for polyester staple fibre purposes is poly
(ethylene terephthalate), or simply PET. This is also the polymer used for many
soft drink bottles and it is becoming increasingly common to recycle them after
use by re-melting the PET and extruding it as fibre. To manufacture Polyester
staple fibre, used PET bottles are taken as inputs. They are crushed and
converted into PET flakes. These PET flakes are then charged to extruders where
they are melted and molten polymer is passed through spinnerets to obtain TOW.
The tow is drawn and then cut into different lengths to obtain PSF.
- As per Chapter Note 1 to Chapter 54,
1. Throughout this Schedule, the term “man-made fibres” means staple fibres and
filaments of organic polymers produced by manufacturing processes, either:
- by polymerisation of organic monomers to produce polymers such as
polyamides, polyesters polyolefins or polyurethanes, or by chemical modification
of polymers produced by this process [for example, poly (vinyl alcohol) prepared
by the hydrolysis of poly (vinyl acetate)]; or
- by dissolution or chemical treatment of natural organic polymers (for
example, cellulose) to produce polymers such as cuprammonium rayon (cupro) or
viscose rayon, or by chemical modification of natural organic polymers (for
example, cellulose, casein and other proteins, or alginic acid), to produce
polymers such as cellulose acetate or alginates.
The terms “synthetic” and “artificial”, used in relation to fibres, mean:
synthetic: fibres as defined at (a); artificial: fibres as defined at (b). Strip
and the like of heading 5404 or 5405 are not considered to be man-made fibres.
The terms “man-made”, “synthetic” and “artificial” shall have the same meanings
when used in relation to “textile materials”.
Thus manmade fibre can be obtained either starting from monomers or from
polymers itself. The process of manufacture is not determinative of the
classification of the manufactured product. What is essential for determining
the classification is the nature of the end product and the market understanding
of the said end product. In the present case there appears to be no dispute with
regard to the nature and commercial understanding of the product viz Polyester
Staple Fibre.
-
As per technical literature uses of Polyester Fibre are as follows
· Apparel: Every form of clothing
· Home Furnishings: Carpets, curtains, draperies, sheets and pillow cases, wall
coverings, and upholstery
· Other Uses: hoses, power belting, ropes and nets, thread, tire cord, auto
upholstery, sails, floppy disk liners, and fibrefill for various products
including pillows and furniture
-
From the above facts it is quite evident that the product under consideration
is nothing but a textile material and hence will be classified as textile
material under Section XI and not as article of plastic in Chapter 39.
-
Tribunal decision in case of GPL Polyfils Ltd [2005 (183) ELT 27 (T)] would
be relevant to the particular facts as in the said case and hence cannot have
binding precedents in other matters.
-
To ensure uniformity in the manner of classification of the Polyester Staple Fibre obtained from PET scrap and waste bottles it is clarified that this
product is correctly classifiable under heading 55032000.
-
Based on the above clarification pending cases may be disposed of.
-
Receipt of this order may please be acknowledged.
-
Hindi version will follow.
(Madan Mohan)
Under Secretary to the Government of India
F.No.55/1/2010-CX.1