Prima facie limitation on disclosed manufacture justified partial waiver despite dispute over guar gum classification and manufacture.

At the interim stage of waiver of pre-deposit, the Tribunal declined to conduct a full merits review of manufacture and classification, and found no prima facie perversity in the departmental view that blending guar dal powder with additives produced guar gum under Chapter 13. On limitation, however, it accepted a prima facie objection because the manufacturing process had been disclosed annually under Rule 174 of the Central Excise Rules, 1944 and the description was not shown to be incorrect. The result was partial relief: the balance of the duty and penalties was waived pending appeal, subject to a pre-deposit of Rs. 25 lakhs.

---

---

Issues: Whether, at the stage of waiver of pre-deposit, the applicants had made out a prima facie case on the questions of manufacture and classification, and whether a prima facie case existed on limitation for the demand.

Analysis: The demand arose from blending bought-out guar dal powder with additives to produce a product found by the departmental authorities to be guar gum classifiable under Chapter 13. At the interim stage, the Tribunal declined to examine in depth whether the process amounted to manufacture or whether the product was correctly classifiable, holding that no prima facie perversity was shown in the classification finding. The Tribunal, however, found prima facie force in the plea of limitation because the manufacturing process had been declared annually under Rule 174 of the Central Excise Rules, 1944 and the description was not shown to be incorrect. On that basis, only the demand for the normal period remained relevant for interim consideration.

Conclusion: The applicants were not entitled to complete waiver on merits, but were granted substantial relief by requiring pre-deposit of Rs. 25 lakhs and waiver of the balance duty and penalties pending the appeals.

Ratio Decidendi: At the stage of stay or waiver of pre-deposit, complete merits of manufacture and classification are ordinarily not finally examined, but a prima facie limitation objection based on disclosed manufacture may justify partial waiver and stay of recovery.

---