TMI Blog2017 (7) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Customs, Kolkata Vs. Rupa And Co. Ltd., [2004 (7) TMI 90 - SUPREME COURT OF INDIA] wherein the Hon'ble Supreme Court while considering the similar facts with regard to the textile machinery imported under EPCG scheme defined what would be meant by the term capital goods has held that So long as the imported machinery is used by a person who manufactures garments, which are then used to meet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, as they are not capable of producing/manufacturing any Garment and the end product manufactured out of the imported Circular Knitting Machines is only an Unprocessed Knitted Fabric. Accordingly, the respondent denied the benefit of exemption from basic Customs Duty and for levy of tax at 10% counter veiling duty. 3. The legal issue involved in these writ petitions are squarely covered by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hinery and equipments. The terms also includes instruments for testing, research and development. The term includes machines for pollution control, refrigeration, power generating sets etc. Thus, for example, if after manufacturing of textile garments the same have to be packed, the machinery required for packing would be capital goods required for manufacture of textile garments. Similarly, refri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of textile garments would thus include all machines required for the ultimate manufacture of the garments. The Notification has its own safe-guards. The import can only be under a license issued under the EPCG Scheme. The license would contain a condition that garments must be exported by the importer. The Notification also contains a condition that the capital goods (which are imported) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the imported machinery is used by a person who manufactures garments, which are then used to meet the export obligation, the importer will be entitled to benefit of 100% exemption under the Notification 4. In the light of the above, by applying the above decision to the facts and circumstance of the case, the only conclusion that can be arrived is to set aside the impugned orders. According ..... X X X X Extracts X X X X X X X X Extracts X X X X
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