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Issues:
- Interpretation of Customs Notification No. 29/1997 regarding exemption for circular knitting machines in the manufacture of textile garments. Analysis: The Appellate Tribunal CESTAT, CHENNAI heard an appeal by the revenue challenging the Order-in-Appeal granting exemption to circular knitting machines under amended Notification No. 29/1997 for textile garment manufacturing. The revenue contended that circular knitting machines are fabric processing machines, not used in making readymade garments directly, unlike other garment-making machines. They argued that unprocessed knitted fabrics from circular knitting machines require further processing by various other machines before garment manufacturing. The revenue cited Tribunal judgments supporting their position. The revenue's representative reiterated the grounds of appeal, emphasizing the fabric-making nature of circular knitting machines. In response, the respondent's advocate supported the Commissioner (Appeals)'s decision, citing judgments by the Tribunal in similar cases, stating that knitting machines are essential for fabric processing in garment manufacturing. The advocate highlighted that the manufacturing process involves multiple steps, starting with fabric knitting, and supported the Commissioner's decision based on precedent. After considering both parties' arguments, the Tribunal found the issue had been previously settled in a case involving Premina Exports, where it was held that knitting machines qualify for the benefit of Notification No. 29/1997. The Tribunal referenced various judgments from coordinated Benches and the Supreme Court to support their decision. Consequently, the Tribunal upheld the Commissioner (Appeals)'s order, finding no flaws and rejecting the revenue's appeal. The Tribunal's decision was based on established legal precedents and interpretations, affirming the entitlement of circular knitting machines to exemption under the Customs Notification for textile garment manufacturing.
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