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Issues:
The issue involved in this case is the interpretation of Notification No. 23/98-Cus. dated 2-8-98 (Sl. No. 246) regarding the exemption of customs duty for goods imported for the manufacture of medical equipment. Details of the Judgment: 1. The appeal was filed by the Department against the order of the Commissioner (Appeals) granting the benefit of the Notification to the respondents for importing unsterilized needles required for the manufacture of medical equipment falling under SH 9018.31. The Notification exempted goods falling under Chapter 90 from payment of duty in excess of 10% if they were parts required for the manufacture of medical equipment. The original authority did not consider sterilization as 'manufacture', but the Commissioner (Appeals) found that sterilization followed by packing constituted 'manufacture'. Therefore, the benefit under the Notification was allowed to the respondents. 2. The main ground raised in the appeal was that sterilization does not affect classification and unsterilized needles should be classified under SH 9018.32, not SH 9018.39 as held by the Commissioner (Appeals). However, the appellant did not dispute that sterilization amounted to 'manufacture'. The imported needles were cleared along with syringes in blisters after sterilization, which the appellant also did not contest as 'manufacture'. Therefore, the needles imported by the respondents were deemed necessary for the manufacture of medical equipment under Heading No. 90.18. 3. The decision of the Commissioner (Appeals) was upheld, and the appeal by the Department was dismissed. The activity of sterilizing the needles and packing them with syringes in blisters was considered as 'manufacture', making the imported needles eligible for the benefit under the Notification. Separate Judgment: No separate judgment was delivered in this case.
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