Wider meaning of "consumption" under exemption notification supported waiver of pre-deposit for packing containers used in oil manufacture.

The exemption notification covered specified goods consumed within the factory of production in manufacturing specified goods, and the dispute was whether metal containers used for packing soya oil were "consumed" for that purpose. A wider fiscal meaning of consumption was applied, treating utilisation of the commodity as sufficient even if it retained its identity after use. On that basis, the appellant established a debatable prima facie case for exemption and obtained waiver of pre-deposit of duty and penalty pending the appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit of duty and penalty in the stay application.

Analysis: The notification exempted specified goods consumed within the factory of production in the manufacture of specified goods. The dispute turned on whether metal containers used for packing soya oil could be treated as "consumed" within the meaning of the exemption notification. Reliance was placed on the wider fiscal meaning of consumption as including any utilisation of the commodity, even if it retains its identity after use. On that basis, the appellant showed a debatable case for exemption and for relief against pre-deposit at the interim stage.

Conclusion: The appellant was entitled to waiver of pre-deposit of duty and penalty during pendency of the appeal.

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