Circular knitting machines qualify for customs exemption when used in garment manufacture; revenue appeal rejected.

Circular knitting machines used in the manufacture of textile garments were treated as eligible for exemption under Notification No. 29/97-Cus. The Tribunal followed its earlier coordinate Bench ruling, which had held that such machines are used in knitting and processing of fabrics for garment manufacture and that the issue was no longer res integra. It found no infirmity in the Commissioner (Appeals) order granting the exemption and rejected the revenue appeal.

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Issues: Whether circular knitting machines were eligible for exemption under Notification No. 29/97-Cus. as machines required for manufacture of textile garments.

Analysis: The Tribunal noted that the question had already been decided by the same Bench in an earlier case, where knitting machines were held to be used in knitting and processing of fabrics employed in the manufacture of garments and to qualify for the benefit of the notification. Since that decision had been rendered after considering the view of coordinate Benches and the Supreme Court, the issue was treated as no longer res integra. The Tribunal found no infirmity in the order of the Commissioner (Appeals) granting the exemption.

Conclusion: Circular knitting machines were held entitled to the benefit of Notification No. 29/97-Cus., and the revenue appeal was rejected.

Ratio Decidendi: Where knitting machines are used in the process of manufacturing garments, they fall within the scope of the relevant exemption notification and the benefit cannot be denied merely because the process involves multiple stages.

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