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2009 (8) TMI 1060

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..... e 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 cleared from the factory and appropriated the said goods as dutiable goods cleared from the factory for the period from March, 2007 to November, 2008. The appellants cleared precision glide needles 5000 PK/bulk needles without payment of Central Excise duty on assumption that the process of sterilisation and packing performed after importation of the said goods do not constitute manufacture and that no Ce .....

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..... e 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 department has taken a similar view and that it is under challenge before the Tribunal, the same has not been disturbed at. 4. The learned Counsel appearing for the appellants placing reliance in various decisions submitted that process of sterilisation in no manner changes the identity of the product and needle remains the needle even after the product undergoes such process. In that regard, heavy reliance i .....

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..... e 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, on the other hand, submitted that the process of sterilisation apparently discloses the manufacturing activity inasmuch as that the product pursuant to such process attains separate and distinguished identity as well as marketability for specific class of purchasers, Further, drawing our attention to earlier decision in stay application in appellant s case itself, he submitted that cases sought to .....

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..... rilisation 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, The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture. It was further held that, where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of a .....

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..... tay. 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 to be relied upon and which obviously support the contention canvassed on behalf of the appellant, and the chart submitted by the appellant discussing the maximum liability could be to the extent of 40,98,091/-. The same being with reference to the period from March, 2007 to November, 2008, in our considered opinion, it would be appropriate to direct the appellant to deposit the total amount of Rs. 50 .....

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