Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Customs (Appeals), ... vs Marvel Glove Industries on 23 August, 2004
Equivalent citations: 2005(180)ELT117(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1. Revenue is in appeal, aggrieved by the order of the Commissioner (Appeals), who allowed exemption under Notification 29/97 CUS dated 01.04.97 for an import under EPCG scheme to a machine imported by the respondent, which was an "Automatic Seamless Glove Making Machine". This was imported under an obligation to export knitted seamless gloves plain type (knitwear) and anti-slip knitted seamless gloves with polka dots or coating knitwear.
2. This import was not allowed by the original authority on the grounds:-
i) Notification 29/97 (as amended) had the following paragraph:
"Provided that the said goods are required for manufacturing Textile Garments (including knitwear), such goods shall be exempted from whole of additional duty leviable thereon under Section 3 of the said Customs Tariff Act".
ii) The goods 'knitted gloves' to be manufactured by the machine are textile garments (wearing knitwear) was not acceptable.
iii) The classification of Textile Commissioner dated 25.02.99 certifying the knitted gloves to be textile garments produced by the exporter, nor the dictionary meaning of knitwear and import/input output norms and DEEC Books guidelines goods like mufflers, stockings, knitted gloves to be treated as garments was not acceptable since vide Section Note 13 to Section XI of Customs Tariff and as per general understanding caps, mufflers, gloves, stockings, etc. were clothing accessories and not garments and the documents and letters produced by importers cannot be guides to interpret the notification.
3. CC (Appeals) allowed the appeal on the grounds -
i) Section Note (as relied by lower authority) are relevant for classification and not for determining eligibility under the notification.
ii) Section Note 13 of Section XI of Central Tariff includes knit wear under category of textile garments.
iii) Textile garments were not defined under the notification, therefore, the terms has to be given a meaning commonly understood.
iv) On the basis of classification issued by Textile Commissioner, dictionary meaning and nexus for other export scheme, the gloves would be covered under the notification.
4. Revenue is aggrieved by the order of CC (Appeals) on the grounds -
i) Lower authority has no where held knitted gloves to be treated as knitwear.
ii) Lower authority has relied upon section note 03 of Section XI as well as general undertaking of Gloves being accessories and not garments.
iii) Section notes not being relevant is an erroneous finding. Notification issued under section 25 exempting duty has to be interpreted by application of notes in Tariff Textile Garments do not cover knitted Gloves as per the note, therefore notification 29/97 is not eligible.
iv) Knitwear will be restricted in wearing to cover garment and not cover Gloves.
v) Reliance on Textile Commissions and Joint Director General of Foreign Trade letters is uncalled and erroneous and exemption to duty cannot be based on EXIM Policy duty classification.
vi)The provision of Standard Input Output norms at S No. J-158 is for `READYMADE GARMENTS', HOISERY AND KNITWEAR and not only for READYMADE GARMENTS. Therefore reliance by the CC (Appeal) on the same is misplaced.
vii) CC (Appeal) finding of endorsement by DGFT of item 61.16 and 62.16 on the licence is incorrect and finding by him, that socks/stockings, mufflers, shawls falling under sub-heading 61.15 and 61.17 of Custom Tariff are classed as `Ready made garments' is erroneous.
viii) Notification 29/97 does not provide exemption from additional duty on knitted gloves which are neither known as garment in trade parlance not classifiable as Textile Garments as per Section Note 13 of Section XI.
5. After hearing both sides and considering the issue, it is found -
a) The exemption under notification 29/97 is for an `Export incentive scheme'. For this notification, the purport and interpretations required as regards the terms used therein have to be arrived at as per apex court decision in case of Commissioner of Central Excise, Kolkata vs. Rupa & Co. 2004 (170) ELT 12 ( (SC), wherein it was ruled -
"7.... An exemption Notification has to be constrained strictly but that does not mean that the object and purpose of the Notification is to be lost sight of and the wording used therein ignored. Where the wordings of the Notification are clear and unambiguous, they have to be given effect to. Exemption cannot be denied by giving a construction not justified by the wordings of the Notification. The Notification has been issued pursuant to the EPCG scheme. The import of goods is under a licence, which contains an export obligation...."
Following the same, the interpretation to be given to the words "Textile Garments (including knit wears)" has to be effected in include all sorts of knit wears and not exclude gloves used by humans made from knitted material.
6. (a)The word `Garment' as per dictionary meaning covers `An article of dress'. Gloves are an essential article to be worn by ladies in the west as a part of formal attire, and all other as protection from extreme cold. It is necessary part of wear. It is a part of wear in countries, where the exported product manufactured by the machine will eventually be sent. The interpretation placed by restrictions of note 13 to Section XI for classification will not find approval by us. Some gloves are regular worn and are in vogue as water wears.
(b)No reasons are found to disagree with the finding on the inapplicability of note 13 to Section XI as arrived by the ld. CC (Appeals.)
(c) The classification/certificate from the Government of India, Ministry of Textiles, vide letter No.40(2)/Misc'94/Wvg/49 dated 23.2.99 to Commissioner, Mumbai, cannot be disregarded, it certifies knitted seamless gloves to be knitted garments. It has great persuasive value as it would indicate how the entity is understood by the persons dealing in them. Such understanding can be applied to interpret the term `Textile Garments (including knit wear)' used in the notification since the notification has not defined the term.
(d) We find therefore no reasons to upheld the Revenue appeal.
6. In view of the findings, the appeal is rejected.