Manufacturing exclusion from Business Auxiliary Service justified complete waiver of pre-deposit where product-making activity was prima facie manufacturing.

The exclusion from Business Auxiliary Service applies to manufacture as such, not merely to manufacture of excisable goods. Manufacture was understood in its settled sense as bringing into existence a new substance through a process that transforms raw material. On that basis, the activity of preparing the product under the agreement was treated as manufacturing activity, and the fact that the final product was not excisable did not remove it from the manufacturing exclusion. That was sufficient to establish a prima facie case for complete waiver of pre-deposit, and stay of recovery was granted during the appeal.

---

---

Issues: Whether the applicant had made out a prima facie case for waiver of pre-deposit on the ground that the activity undertaken was manufacture and therefore fell outside the scope of Business Auxiliary Service.

Analysis: The exclusion from Business Auxiliary Service was held to apply to manufacture as such, and not only to manufacture of excisable goods. The meaning of manufacture was understood in the settled sense of bringing into existence a new substance by a process that results in transformation of the raw material. On that basis, the preparation of the product under the agreement was treated as a manufacturing activity. The fact that the final product was not excisable did not take the activity out of the manufacturing exclusion. This was sufficient to show a prima facie case for complete waiver of pre-deposit.

Conclusion: The applicant was entitled to waiver of pre-deposit and stay of recovery during pendency of the appeal.

---