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2009 (8) TMI 1060

..... he Appellant. Shri P.K. Singh, DR, for the Respondent. ORDER Heard at length the learned advocate for the appellants and the learned DR for the respondents. The appellants challenge the order dated 17-3-09 passed by the Commissioner, Gurgaon, whereby duty to the tune of Rs. 2,30,36,227/- has been demanded along with interest thereon and equal amount of penalty has also been imposed. The appellants are engaged in manufacture of medical, surgical instruments and appliances and they are also engaged in importing, sterilising and packing of needles/bulk needles which fall under Chapter Heading No. 9018.00 of Central Excise Tariff Act, 1985. The appellants availed Cenvat credit on the inputs used in the manufacture of dutiable products and clear .....

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..... on behalf of the appellants that even calculation of duty has been erroneously done and computation of duty demand cannot be directly worked out on the value of excisable goods but must be borne from cum-duty price. In that regard, it is also the case of the appellants that demand of duty is required to be abated to the extent of Cenvat credit available on the inputs in case the process is held to be manufacture. 3. On the other hand, it is the case of the department that the process of sterilisation change the identity of the product and it is also marketable not as a normal needle but a product which has specialised qualities and used for specific purposes. Besides, according to the respondents in respect of earlier period, the departmen .....

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..... Phoenix Mills v. CCE, Mumbai reported in [1999 (113) E.L.T. 1018 (Tri.)]; and Johnson & Johnson Ltd. v. CCE, Mumbai reported in [2003 (154) E.L.T. 729 (Tri.-Mumbai). He also submitted that decision of the Tribunal in CCE, Mumbai-V v. Servo-Med. Ind. Pvt. Ltd. reported in [2004 (172) E.L.T. 318 (Tri.-Mum.)] is not in consonance with that of the Supreme Court on the aspect of concept of manufacture within the meaning of the said expression under the said Act. He also submitted that the decision of the Tribunal in stay matter in appellant s own case in earlier appeal was essentially in terms of Servo-Med. Ind. Pvt. Ltd. without taking note of the Supreme Court decision which is sought to be relied upon in the matter in hand. 6. Learned DR .....

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..... n to take a different view at this stage on the point as to whether sterilisation amounts to manufacture or not. Besides as rightly pointed out by the learned DR, the process of sterilisation gives a distinct identity to the needle which are otherwise available in common market. It has also a distinct class of purchasers. This distinguishing factor of identity of needles as a result of process of sterilisation prima facie discloses the activity of sterilisation tentamount to manufacture within the meaning of the said expression under the said Act and therefore, we do not find any justification for grant of stay of the impugned order. As far as decision of the Apex Court in PIO Food Packers case is concerned, it has been clearly held that, T .....

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..... nufacture. That is not in the case in the matter of sterilisation of the product in question. Sterilised needle would not remain mere needle itself. That would make the process of sterilisation tantamount to manufacture. Such a process would definitely change the identity of the product as stated above. Needless to say that the observations are prima facie observations to decide the application for stay. 9. In the circumstances as above, we do not find it necessary to refer to other decisions sought to be relied upon. 10. As far as the second ground of challenge is concerned, we do prima facie find force and substance in the same and in the absence of any material being disclosed, particularly bearing in mind the decision which are sought t .....

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