Job-work processing did not prima facie defeat exemption where pulp was manufactured in-house and final paper products were made in the appellant's factory.

On a prima facie reading, job-work processing of pulp did not disqualify the manufacturer from exemption under the relevant notifications where the appellant manufactured the pulp itself and produced the final paper products in its own factory. The Tribunal noted that the departmental circular addressed a different situation involving imported or bought-out pulp, and that the notification conditions did not appear to require every stage from pulp to finished paper to be carried out in the same factory. On that basis, the appellant was treated as prima facie eligible for exemption, and waiver of pre-deposit with stay of recovery was granted.

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Issues: Whether the appellant had made out a prima facie case for exemption under the relevant notifications when certain processing was undertaken through a job worker, and whether waiver of pre-deposit and stay of recovery were warranted.

Analysis: The appellant manufactured the pulp itself and the final paper products were also manufactured in its own factory, though some processing of pulp was carried out at the job worker's premises. The circular relied upon by the Department was understood to deal with a different situation involving use of imported or bought-out pulp. On the materials placed before the Tribunal, the notification conditions were not seen as requiring that every process from pulp to finished paper must be performed in the same factory, and the job-work arrangement did not, on a prima facie view, disqualify the appellant from the exemption.

Conclusion: The appellant was held to be prima facie eligible for the exemption, and waiver of pre-deposit together with stay of recovery was granted.

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