Section 11D and no-sale clearances: pre-deposit was waived where job-work removals were treated as outside sale of goods.

Section 11D was treated as prima facie inapplicable where goods were manufactured on job-work basis and cleared to merchant-manufacturers without sale of goods. On that factual footing, the Tribunal applied the cited Apex Court principle and dispensed with the directed pre-deposit for stay purposes. Recovery was stayed pending appeal because the clearances were treated as removals not involving sale under Rule 173C(1).

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Issues: Whether, for the purpose of stay, the applicants were required to make the directed pre-deposit when the demand was founded on Section 11D and the clearances were made without sale of goods.

Analysis: The order records that the goods were manufactured on job-work basis and cleared to merchant-manufacturers without sale. On that factual basis, the legal principle referred to from the Apex Court decision was held to be prima facie applicable, because Section 11D would not operate where there was no sale of goods. The Tribunal also noted that the goods were treated as removed in a manner not involving sale under Rule 173C(1).

Conclusion: The requirement of pre-deposit was waived and recovery was stayed pending the appeal.

Ratio Decidendi: Section 11D is prima facie inapplicable where the goods are cleared without sale, and in such a case pre-deposit may be dispensed with for stay purposes.

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