News Update

Revenue Secretary urges CMs to expedite passage of SGST ActExit Polls - AAP staring at humiliating defeat; BJP likely to score historic winACC appoints IRS officer Ravi Singh as Addl Private Secretary to Power MinisterACC appoints IRS officer Ravi Singh as Addl Private Secretary to Power MinisterUSA favours 'reciprocal' free trade: Treasury ChiefShillong Customs seizes 800 kg of ganja concealed in especially-designed cavity in a truckCBEC Chairperson calls for speedy GST Awareness CampaignINTERPOL drive against illicit firearms - 149 arrested across EuropeGreen Bond Market Has Grown Healthy In 5 Yrs: IREDAIndia turning into hub of international arbitration: Chief Justice of IndiaTaliban forces kill over 100 Afghan soldiersGST Council looking for applicants to fill up CSSS postsEmerging economies account for 75% of global growth: FMDuty Credit Scrip can be utilised/debited for payment of Custom Duties in case of EO defaults - Para 3.18(a) of FTP 2015-20 amendedServices Exports from India Scheme - Eligible period extended up to 31.3.2017W.e.f. 01.06.2017 only those applications for grant of gold dore would be considered where the applicant refinery holds a valid licence from BISGlobal forex remittances shrink but India continues to be No 1International prices soar; Less availability of milk products this summer: GovtMGNREGA - One crore assets geotaggedInter-Ministerial Delegation going to participate in Basel conventionsRailways to organise Global Technology Conference on SafetyST - Once activity undertaken of supply of food to its workers at subsidized rate is understood to be part of Petitionerís industrial obligation, it is unthinkable that same can be construed as service: HCGoods, after a tour of service abroad, imported by or along with a unit of the Army, Navy, Air Force or CRPF exempted from BCD, CVD & SAD subject to specified conditionsUS Fed Paper says GST may boost India's GDP by over 4%Garib Kalyan Yojana- If tax paid by Mar 31, declaration can be filed by May 10Removal of Cyprus as notified jurisdiction u/s 94A - CBDT clarifies removal notfn to have retro effect11th Civil Services Day: PM cautions officers against excessive use of social mediaApex Court questions Govt decision to link Aadhaar with PANUSD 250 bn Tax Bill - Australian Federal Court rules against ChevronCricket Betting case - CBI chargesheets IRS officer & others
Untitled Document

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF EXCISE AND CUSTOMS
NEW DELHI

CIRCULAR NO

1054/03/2017-CX, Dated: March 15, 2017

To

The Principal Chief Commissioners/ Chief Commissioners/Principal Commissioners of Central Excise (All)
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners of Central Excise & Service Tax (All)

Sub: Classification of ‘Saree’ under CETA, 1985 - reg.

Representations have been received from the members of the trade requesting clarification regarding classification of 'Saree'. The issue raised in these representations is whether the goods described as 'Saree' which has undergone further processing such as embroidery, stitching of lace and tikki etc. and stitched with two or more kinds of fabrics is classifiable as 'Saree' under Chapter 54 or as made-ups under Chapter 63 of the Central Excise Tariff Act, 1985.

2. The issue has been examined. As per Rule (1) of General Rules of Interpretation of the Schedule, "The titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to terms of the headings and any relative Section or Chapter Notes…". Further, as per Rule 3(a) of the said Rule, "The heading which provides the most specific description shall be preferred to headings providing a more general description….".

3. 'Saree' has been specifically classified under Chapter 50, 52 and 54 of the Central Excise Tariff Act, 1985 depending upon the material of the fabrics. Further, even after stitching, embroidery work and fixing of falls etc., a 'saree' remains fabrics only as no new item emerges having distinct name, character and use. Stitching of two or more different kinds of fabrics also does not take away its classification from heading 50, 52 or 54 as in that case, by virtue of Section note 2(A) of Section XI, such 'saree' will be classifiable under the heading as if consisting wholly of that one textile material which predominates by weight over any other single textile material. In case no one textile material predominates by weight, 'saree' is to be classified as if consisting wholly of that one textile material which is covered by the heading which occurs last in numerical order among those which equally merit consideration.

4. Chapter 63 covers 'Other made up textile articles; sets; worn clothing and worn textile articles; rags' which is a more general description. 'Saree' is not specifically classified in this chapter and therefore application of Rule 3(a) [refer para 2] would take out 'Saree' outside the ambit of chapter 63.

5. In view of above, it is clarified that 'Saree' which has undergone further processing such as embroidery, stitching of lace and tikki etc. and stitched with two or more kinds of fabrics will be classifiable as 'Saree' under Chapter 50, 52 and 54 of the Central Excise Tariff Act, 1985 depending upon the material of the fabrics, and not as made-ups under Chapter 63 of the said Act. Each case may be decided on the basis of facts of the case and where further processing of 'Saree' does not change the essential characteristics of the fabric as that of 'Saree', it should continue to be classified as 'Saree'.

6. Difficulty faced, if any, in implementing the circular should be brought to the notice of the Board. Hindi version will follow.

F. No. 116/31/2016-CX.3

(Rohan)
Under Secretary to the Govt. of India