Notification benefit for textile machinery used in garment manufacture upheld on settled interpretation of the production chain.

Imported knitting, winding, compacting and dyeing machines used for knitting and processing fabrics for garment manufacture were treated as eligible for Notification No. 29/97-Cus. because the relevant manufacturing process was understood to commence with knitting of fabrics. The Tribunal view relied on an earlier decision that had already recognised such machines as covered by the notification when used in the garment manufacturing chain. No contrary authority was cited by the Revenue, and the Commissioner (Appeals) order was aligned with the settled interpretation.

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Issues: Whether the imported knitting, winding, compacting and dyeing machines were entitled to the benefit of Notification No. 29/97-Cus. dated 01.04.1997 when used for knitting and processing of fabrics utilised in the manufacture of garments.

Analysis: The issue was held to be covered by an earlier Tribunal decision which had recognised that knitting machines, winding machines, compacting machines and dyeing machines used for knitting and processing of fabrics used in the manufacture of garments qualify for the notification benefit, since the manufacture of garments commences with the knitting of fabrics. The Revenue did not cite any contrary authority, and the order of the Commissioner (Appeals) followed the settled view on the same question.

Conclusion: The imported machines were eligible for the benefit of Notification No. 29/97-Cus. dated 01.04.1997, and the Revenue's challenge failed.

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