Exemption notification for contract farmers' fields covered insecticides used in export production, supporting waiver of pre-deposit.

Notification No. 22/2003-C.E. was read to permit a user industry engaged in processing agricultural products or in manufacturing and packaging articles for export to take specified goods to contract farmers' fields and farms for production or activities connected with production, and to bring back the produce for export. On that construction, movement of insecticides to contract farmers' fields fell within the notification's scope. The prior order dropping proceedings was therefore treated as support for the appellant's position, and a prima facie case was found for waiver of pre-deposit and stay of recovery.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery, in the light of Notification No. 22/2003-C.E. permitting a user industry to take goods to contract farmers' fields and farms for production or in connection therewith.

Analysis: The appellant was engaged in manufacturing and packaging articles for export and was exporting gherkins. Clause 5 of Notification No. 22/2003-C.E. expressly permitted a user industry engaged in processing agricultural products or manufacturing and packaging articles for export to take out specified goods to the fields and farms of contract farmers for production or in connection therewith, and to bring back the produce for export. On that reading, the movement of insecticides to contract farmers' fields fell within the notification, and the order dropping the proceedings was treated as correct for the purpose of considering pre-deposit.

Conclusion: The appellant made out a prima facie case for waiver of pre-deposit and stay of recovery.

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