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TMI Blog2002 (1) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of modern garment unit for the manufacture of knitted and woven garments for export markets like Europe, U.S.A. etc. As per the advice given by the said Federation, various machines essential for making a quality garment of international standards were recommended and the vital role played by each and every machine was explained by them. Thereafter, an application was made to the Directorate General of Foreign Trade (DGFT) for issuance of a licence for import of the requisite machines required for purposes of manufacture of textile garments at '0' per cent of Customs Duty under the Export Promotion Capital Goods Scheme (EPCG). He also submits that the disputed machines imported by the appellants were allowed to be imported by DGFT under the various EPCG licences at '0' per cent of Customs Duty. During the year, 1999-2000, the appellants imported various machines in four consignments and claimed exemption in terms of Notification No. 29/97-Cus., dated 1-4-97 in the bills of entry. The said bills of entry were duly assessed by the Customs Authorities and the machines were allowed to be cleared without payment of duty. 3.After clearance of the machines, the Customs Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts from the stage of grey fabrics. He submits that the Revenue has denied them the benefit by observing that the machines in question are not used for manufacture of garments and the process of manufacture starts only with the cutting of the fabrics. He also submits that the above reasoning is clearly against the law laid down by various authorities and the introduction of the word - directly - in the Notification, is against the well-settled principles of natural justice which are to the effect that no new word can be introduced in the Notification. Drawing our attention to the Notification, he submits that the same allows import of capital goods from the entire additional duty of excise if the said goods are required for the manufacture of textile garments. He submits that there is no iota of doubt that the goods in question are required for the manufacture of textile garments, for which the appellants have been duly licensed. The findings of the authorities below, that the machines in question were used for processing of fabrics and not for manufacture of garments, were mis-conceived, inasmuch as according to the opinion given by the International Federation of Knitting Technol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Notification is to the effect that where the said goods are required for the manufacture of textile garments, the same are exempted from whole of additional duty. As such, the core question to be decided is as to whether the machines under dispute are required for the manufacture of textile garments or not. There is no doubt about the factual position. The machines in question are - (i) Automatic Fabric Reversing Machine, (ii) Tubular Fabric Inspection Machine, (iii) Knitted Fabric Machine, (iv) Short Liquor Fabric Dyeing Machine, (v) Finishing of Tubular Knitting Fabric Accessories, (vi) Folding Device Type PP and Accessories and (vii) Speed Display Machine. As per the appellants, their manufacturing process starts from the point of purchasing of grey fabric from the market and the testing of the fabric for lab-dyeing, inspection of fabric, reversal of fabric, dyeing of fabric, dyeing of the same, calendering of the same - are the processes which are essential for the manufacture of textile garments. Without these processes, it is not possible for the appellants to manufacture their final product - 'Textile Garments'. It is seen from the letter dated 15-1-99 of Internat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Notification and there is no dispute about the same. Inasmuch as the expression used in the Notification is - "…........ .Where the said goods are required for the manufacture of textile garments….....", we are of the view that giving a narrow interpretation to the Notification by holding that only cutting and stitching machines would be covered by the said expression, is not warranted. The process of manufacture of textile garments, as given in detail by the Federation, starts with the inspection and reversal of the fabric and thereafter, various processes are required to be undergone for the actual manufacture of the garments. All these machines are required and essential for the manufacture of the ultimate product. To restrict the benefit of the Notification only those machines which are directly used in the manufacture of the textile garments, would not, in our views, be in accordance with the principles of interpretation of notification. We find favour with the appellants' contention that if that be so, the Notification in question would become infructuous inasmuch as cutting and sewing machines are not specified machines in the Notification. 7.The appellants have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court are fully applicable to the facts of the instant case. The machines in question though may not be strictly used for cutting and stitching of the fibre, but are required for the manufacture of the appellants' final product i.e. textile garment. As such, by following the ratio of the said decision, we hold that the appellants are entitled to the benefit of the notification in question. 9.We would like to refer to the Hon'ble Calcutta High Court's judgment in the case of Naffar Chandra Jute Mills Ltd. v. Assistant Collector of Central Excise reported in 1993 (66) E.L.T. 574 (Cal.) relied upon by the appellants. The Hon'ble Court in the said decision held that the expression - 'bags of jute' - appearing in Notification No. 65/87-C.E., dated 1-3-87 does not mean that the bags should be made entirely or exclusively of jute and the poly-line jute bags would also earn the exemption. The Court held that inasmuch as the Notification did not use the expressions such as 'only' or 'exclusively' or 'entirely' for classifying the inputs, the remarks - 'made of' do not mean 'made exclusively of'. By applying the same ratio in the present case, the Notification nowhere uses the expressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e role in the process of manufacture of finished goods without which manufacture of finished goods could not have become possible, should necessarily be treated as machinery used in the manufacture of such goods. Learned Departmental Representative was not justified in advancing an argument that machineries which are entitled to exemption under Customs Notification No. 13/81 must be those that are meant for the actual process of manufacturing the final product only. Wabo Trucks, P10. H Shovel, Motor Grader, CAT Front End Loader, Terex Front Loader, Komatsu Dozer, 35T Cap Haulpack Truck, Porcelain Excavator and Water Sprinkler used by the appellant in processing the mined ore are vital machineries which play an integral part in the process of manufacture of finished goods. Even though they are not directly involved in the manufacture of the finished goods, they are machineries used in the manufacture of such goods. Spares imported for such machineries are entitled to the benefit of Customs Notification No. 13/81. The contrary views taken by the authorities below are illegal. They are set aside. Authorities below are directed to pass final order on the refund applications as expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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