TMI Blog2001 (7) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 29/97, dated 1-4-1997 against the subject EPCG licence. 2. Under Customs Notification No. 29/97, dated 1-4-97 as amended the machines which are used for processing/manufacture of fabrics and not in the manufacture of textile garments (including knitwear) would not be entitled to benefits of NIL CV duty in terms of provisions to Notification No 29/97. The exemption from C.V. duty under Notification No 29/97-Cus. is available only to those machines which are used in the manufacture of textile garments (including knitwear). As such the machines imported by the Appellants being those which are used in the manufacturing, processing of textile fabrics and not in the manufacture of textile garments (including knitwear) are not entitled to the benefit of NIL C.V. duty under the said notification. 3. It appears that the Appellant vide their letter dated 20-4-2000 contested the contention of the department submitting inter alia that the machines imported by them are essential requirement on a large automatic garment manufacturing unit. For instance, they indicated that the fabric has to be reversed before it could be stated that a fabric has to be inspected by inspecting machine befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e during the pendency of the said appeal and stay application, and the Hon ble Court dispensed with such compliance under Rule 27 of the Writ Rules of the Hon ble Court made for the purpose of hearing the application under Article 226 of the Constitution of India and passed an order in terms of prayer(f) which would continue until and unless further order or orders are passed by the Hon ble Court. In the event of any payment is made by the bank, the same will not be encashed by the Customs Authority until further order or orders are passed by the Hon ble Court. 7. The appeal was listed for hearing on 12-12-2000. S/Shri R.N. Bajoria and J.P. Khaitan, Sr. Advocate/Advocate, respectively, appeared on behalf of the Appellant. They stated that a brief note of the submissions made would be filed by 18-12-2000. However, vide letter dated 18-12-2000, the appellant sought further time; and the matter was listed for hearing again on 20-6-2001. Shri J.P. Khaitan, Advocate appeared on behalf of the Appellant and furnished written submissions and paper book containing the relevant documents and case laws, and reiterated the submissions. 8. In the written submissions it has been contended th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of textile garments issued the zero duty licence; that the said machines are also included in the policy circular dated February 18, 2000 issued by DGFT as Annexure-III thereon. It was therefore, submitted that the appeal be allowed with consequential relief. 10. I have carefully gone through the facts of the case, material on record, the written submissions filed by the ld. Advocate, during the course of personal hearing on 20-6-2001 and the paper book containing the relevant documents annexed to the written submissions. 11. On a perusal of the legislation with Apparel Export Promotion Council, I find that the Appellant has disclosed that it is registered as a manufacture exporter of cotton knitted garments and cotton readymade products. However, the Appellant has not placed on record, a copy of the Director of Industries Registration which would inter alia disclose the specific types of manufacturing/processing activities in which the Appellant is engaged. It is quite likely that the Appellant could be registered, for example, with the Director of Industries as a manufacturer/processor of textile fabrics as well as garments, but may seek registration with the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned capital goods are admittedly used for processing fabrics from Stage-1 to Stage-5 as indicated in the pictorial graph as under :- Stage-1 : As soon as the overseas enquiry comes, the Appellant s well-oiled operative move into action. The specification of colour is being sent to laboratory for lab dyeing for testing and dyeing the fabrics as per customer s requirements. Stage-2 : Inspection of fabrics - Raw (grey) fabrics is inspected on the fabrics inspection machine to avoid manufacturing defects in fabrics. Reversing of fabrics - After inspection, the grey fabrics reversed on the reversing machine. Stage-3 : After inspection and reversing, the Fabrics is dyed on the shop floor in the dyeing machine. Stage-4 : After completion of Stage-3, wet dyed fabrics sent for finishing section for squeezing, drying and compacting of wet fabrics. Stage-5 : Finished dyed fabrics then sent for Calandering for giving extra dimensional stability to fabric for super fine quality of garment. 14. Thereafter, at Stage-6 certain wooden tables have been shown where finished fabrics are sent to cutting section for cutting as per size. This process of cutting is shown to be manual. No mach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The impugned capital goods are in no way put to use in the manufacture of garments. These capital goods complete the processing of fabrics up to Stage 5, and are not put any use thereafter in the manufacture of garments. The contention of the Appellant that they were establishing a new composite unit is, therefore, totally misconceived and not borne out by facts on record. 17. The Appellant s reliance on the Hon'ble Supreme Court decision in the case of Oblum Electrical Pvt. Ltd. v. Collector of Customs, Bombay reported in 1997 (94) E.L.T. 449 is totally misplaced. While the issue before the Apex Court related to the materials used in the manufacture of the resultant products, in the instant case, by the graphic pictorial admittance of the Appellants, it is the fabrics which are used for manufacture of garments and not the imported capital goods. The facts of the present case are clearly distinguishable from the facts before the Hon'ble Supreme Court in the aforesaid decision. 18. Similarly in respect of the contention that the impugned notification does not use the word directly , the contention of the Appellants is not tenable because the notification has made a clear di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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