TMI Blog1997 (6) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;capital goods'' was widened by M.F. (D.R.) Notification 23/94 (N.T.), dated 20-5-1994, to include the - capital goods'' used ''in or in relation'' to the manufacture of final products . The applicant installed the Humidification plant only in June, 1994, which was not disputed. That was the reason why the Commissioner (Appeals) allowed the benefit of Humidification plant being used in or in relation to the manufacture of final product. This aspect has been completely omitted in the impugned order and contrarily it considers that the capital goods should be used in the manufacture of the final product. This is not correct legally. 2. The Explanation to Rule 57Q includes not only machines and machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly. This aspect has not been taken note of by the Tribunal while deciding the case. Hence, the interpretation given is legally incorrect. 3. The contention in the impugned order, that.... production or process would mean physical processing of goods and the capital goods must have a nexus for bringing about any change in the sub-''''stance of the goods by direct participation in the manufacturing stream and humidification only creates atmosphere and does not answer to the use as above . is not correct in law as the interpretation given for humidification in spinning process is at variance with the authoritative Textile books referred-to in the Statement of facts above. The authoritative Textile technology books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticularly important as both spinning and weaving are very sensitive to it. Compromise is therefore made in choosing the R.H. for, the Ring room (Spinning section) so that optimum combination of the above parameters is obtained as RH goes up, strength and extensibility of cotton yarn increases. In another book published by South India Textile Research Association/Coimbatore it is stated : Humidification plant has become an essential part of spinning unit. In order to obtain the ambient condition in the department it is essential to operate humidification plant in a very efficient manner. - relevant xerox copies of pages of books enclosed. From the above it can easily be discerned that there is physical nexus between humidity and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arn. So the misconception that humidification is required to get particular yarn quality is not correct. Reference is invited to the case of J.K. Cotton Mills, : AIR 1965 SC 1310, the Supreme Court HELD : The expression ''''in the manufacture of goods'''' would normally encompass the entire process carried on by the dealer in converting the raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that but for that process manufacture of processing goods would be commercially inexpedient, the goods required in that process would in our judgments falls within the expression ''''in the Manufacture of goods'''& ..... X X X X Extracts X X X X X X X X Extracts X X X X
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