Stenter gallery exclusion governs annual production capacity computation under textile capacity rules, favouring the assessee.

For computing annual production capacity under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998, a gallery attached to a stenter is not treated as part of the chamber or as equipment aiding heat setting or drawing of fabrics. The text follows an earlier Larger Bench view that the gallery cannot be included in the capacity calculation, and that controlling interpretation was applied because it had not been set aside or stayed. The issue was resolved in favour of the assessee, excluding the gallery length from the stenter chamber computation.

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Issues: Whether the galleries attached to stenters form part of the chamber and are to be included for determining the annual production capacity under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998.

Analysis: The issue was treated as covered by an earlier Larger Bench decision which held that the gallery is not an equipment aiding the process of heat setting or drawing of fabrics within the meaning of Explanation 1 to Rule 3. On that basis, the length of the gallery cannot be taken into account while computing the production capacity of the stenter. As the Larger Bench view had not been set aside or stayed, it governed the present appeals.

Conclusion: The gallery attached to the stenter is not to be included in the chamber for computation of annual production capacity; the issue was decided in favour of the assessee.

Final Conclusion: The Revenue's appeals and the connected stay petitions were disposed of by applying the controlling Larger Bench decision on stenter gallery inclusion.

Ratio Decidendi: For computing annual production capacity under Rule 3, a gallery attached to a stenter cannot be treated as part of the chamber or as an equipment aiding heat setting or drawing of fabrics.

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