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Issues:
Interpretation of exemption notification under Notification No. 11/97-Cus for imported equipment for textile industry. Analysis: The appellants imported Reverse Osmosis Elements and Membranes Housing Fibreglass Reverse Osmosis Pressure Vessels under bill of entry dated 5-6-97 and claimed exemption under Sl. No. 150 of Notification No. 11/97-Cus for machinery required for the textile industry. The dispute arose when the lower authorities held that exemption is available only if all the equipments listed in Sl. No. 30 of List 10 are imported, not just one. The appellants argued that any equipment specified in List 10 is eligible for exemption, as each machinery used in the effluent treatment unit should be considered as a separate unit eligible for exemption under Sl. No. 150. They also contended that the benefit of Sl. No. 151 should be granted, which exempts parts used for manufacturing machinery listed in List 30, subject to compliance with Customs rules. The Commissioner (Appeals) upheld the denial of exemption, emphasizing that each unit must be imported with all devices listed in the respective entry, and the notification's scheme does not allow for partial imports. The Tribunal observed that the notification's drafting lacked clarity, as it did not specify whether the exemption applies to a complete Effluent Treatment Unit with all listed components or to any individual component. Acknowledging that some components are mutually exclusive and cannot be part of a single system, the Tribunal extended the benefit of the exemption to the imported goods to avoid defeating the purpose of the exemption granted to effluent treatment units. The Tribunal noted that a strict, legalistic interpretation would hinder textile mills complying with Pollution Control laws mandating the installation of such imported equipment. The decision to grant exemption was made to align with the intended objective of the notification and ensure practical application in line with industry requirements and environmental regulations. In conclusion, the Tribunal allowed the appeal, overturning the lower authorities' decision and granting the benefit of the exemption under Notification No. 11/97-Cus to the imported equipment for the textile industry, emphasizing the need for a pragmatic approach in interpreting legal provisions to serve the underlying purpose and industry needs effectively.
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