Prima facie manufacturer status in excise disputes depends on legal effect of transfer arrangements and compliance records.

Where an appellant claims that excisable goods were manufactured by another entity under a memorandum of understanding, the claim is weakened if the appellant continues to hold central excise registration, file returns, and does not communicate the arrangement to the department. The record must show that the transfer arrangement was given legal effect and that the alleged transferee followed the required excise procedure, including seeking transfer of registration. On the available facts, the appellant did not establish a strong prima facie case against the duty demand, and the materials indicated that duty liability could still attach to the appellant. A further pre-deposit was therefore required, with waiver of pre-deposit and stay of recovery on compliance.

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Issues: Whether the appellant had made out a prima facie case that it was not the manufacturer of the excisable goods and, consequently, whether a further pre-deposit was required under the stay provisions.

Analysis: The dispute arose from a plea that the goods were manufactured by another company under a memorandum of understanding, while the appellant continued to retain central excise registration and file returns. The recorded materials did not show that the transfer arrangement had been carried into legal effect, nor that the alleged transferee had sought transfer of registration or followed the excise procedure. On the available record, the appellant's continued registration, returns, and non-communication of the arrangement to the department weighed against its claim. In such circumstances, the appellant failed to establish a foolproof prima facie case against the duty demand, and the material on record indicated that duty liability could attach to the appellant.

Conclusion: A further pre-deposit was warranted, and the appellant was directed to deposit an additional amount, with waiver of pre-deposit and stay of recovery upon compliance.

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