Job-work exemption for weld mesh used in poultry cages supported waiver of pre-deposit and stay despite procedural lapse.

Job-work clearances of weld mesh used in the manufacture of poultry cages were considered prima facie eligible for exemption under Notification No. 83/94-C.E. because the goods were supplied by poultry farm owners and their use in exempted manufacture was admitted. At the stay stage, the objection that the principal users were not manufacturers was treated as untenable on the material available, and the absence of the prescribed undertaking was regarded as a procedural lapse. The possibility of input duty credit also supported interim protection, leading to waiver of pre-deposit and stay of recovery.

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Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery on a prima facie view that the job-worker exemption under Notification No. 83/94-C.E. was available in respect of weld mesh supplied for manufacture of poultry cages.

Analysis: The goods were manufactured by the assessee as a job worker from raw materials supplied by poultry farm owners and were used in the fabrication of poultry cages. The notification granted exemption to job workers manufacturing excisable goods for SSI units, subject to an undertaking by the principal manufacturer regarding use of the goods in the manufacture of exempted excisable goods. On the material placed, the use of the weld mesh in the manufacture of poultry cages was admitted, and the objection that the poultry farm owners were not manufacturers was found prima facie untenable. The absence of the undertaking was treated as a procedural lapse at the stay stage. The possibility of input duty credit also supported grant of interim relief.

Conclusion: The appellants were held entitled, at the interim stage, to the benefit of Notification No. 83/94-C.E. for waiver of pre-deposit and stay of recovery.

Ratio Decidendi: In a stay proceeding, admitted use of job-work goods in the manufacture of exempted goods and a prima facie view that the principal users are manufacturers can justify interim protection notwithstanding a procedural omission in furnishing the prescribed undertaking.

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