TaxTMI 
TaxTMI 
2004 (7) TMI 90
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....le of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from so much of the additional duty leviable thereon under section 3 of the said Customs Tariff Act, as is in excess of the amount calculated at the rate of 10% of the value of goods : Provided that where the said goods are required for - (i) the manufacture of leather garments, textile garments (including knitwears), agro products and products of horticulture, floriculture, poultry and bio-tech products, or (ii) rendering services to hotel industry, such goods shall be exempted from the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act. xxxxxxxxx xxxxxxxxx 6. The capital goods imported, assembled or manufactured as in stalled in the importer's factory or premises and a certificate from the jurisdictional Assistant Commissioner of Central Excise or independent Chartered engineer, as the case may be, is produced confirming installation and use of capital goods in the....
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....nd additional duty. 4.Parties are agreed that cutting and stitching machine would be capital goods required for manufacture of garments. The Respondents, in this batch of Appeals, had however imported machines required for processing of fabric/yarn, fabric inspection machines, machines for knitting and dying fabrics and other such machines. The Respondents were denied benefits of 100% exemption on the ground that the machines imported by them were not required for the purposes of manufacture of textile garments. The Appeals filed by the Respondents to the Commissioner (Appeals) had been dismissed. 5.The Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT) has, in these cases, held that the term "goods are required for manufacture of" in the proviso was wide enough to cover even these machines. The Tribunal has relied upon a letter dated 15th January, 1999 from the International Federation of Knitting Technologists which states that for export of garments to Europe and U.S.A, good quality is required. It is opined that to manufacture good quality garments one has to first select a good quality fabric, then the fabric is required to be reversed to prevent the right side of t....
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.... for capital goods used for manufacture of ""textile products" the exemption is restricted only to whole of custom duty and so much of the additional duty as is in excess of 10% of the value of the goods. He submits that the words "textile products" would include fabric, yarn etc. He submits that the term "textile garments" would not include fabric, yarn etc. He submits that the use of the words "textile garments" clearly show that the capital goods required for manufacturing of yarn or fabric do not fall within the proviso. He submits that it is only capital goods directly required for manufacture of textiles garments which get 100% exemption. He also relies upon a Circular bearing No. 13/2000-Cus., dated 22nd February, 2000 issued by the Board wherein it has been clarified that 100% exemption as per the Notification is not to be given to machines which are used for knitting, dyeing and/or for compacting machines which are used in the manufacturing/processing of fabrics. The Circular states that 100% exemption is only to be given to machines which are used for the manufacturing or processing of textiles garments. Mr. Ganguli also relies upon a letter dated 18th April, 1999 from th....
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....hat product. It was held that the term must be given its natural meaning to also include materials which would be required in order to manufacture the resultant product. It has been held that the term would also include materials which are not directly used in the manufacture of resultant product but are still required for the purposes of manufacturing the resultant product. It is held that the term was wide enough to include not just products which are directly involved in the process of manufacturing but also products which would be necessary for the ultimate manufacture. We are in agreement with this view. 8.Further, in our view, this Notification is very clear. The 100% exemption is given to capital goods required for manufacture of, amongst others, "textile garments". The term "capital goods" has been defined in the Notification. The term "capital goods" means goods which are used in the manufacture of that product and also goods which would be required for manufacture or production of other goods including packaging machinery and equipments. The term also includes instruments for testing, research and development. The term includes machines for pollution control, refrigerati....