Area-based exemption declaration treated as procedural lapse, supporting waiver of pre-deposit and stay relief

Omission to file the declaration required under the area-based exemption notifications for units in Himachal Pradesh was treated as a procedural lapse, because the declaration operated only as an intimation and not as a substantive eligibility condition. The appellant's claim that the activity did not amount to manufacture was also considered relevant, and the interim relief inquiry was further supported by financial hardship and the factory's closed condition. On that basis, waiver of pre-deposit was granted and stay was allowed.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay, notwithstanding non-filing of the declaration prescribed under the area-based exemption notifications for units located in Himachal Pradesh.

Analysis: The claim for exemption was based on notifications intended to promote industrial development in the notified area. The omission to file a declaration was treated as a mere procedural lapse, since the declaration was only an intimation and not a substantive condition such as a clearances-based requirement. The appellant's belief that the activity did not amount to manufacture was also considered relevant. Financial hardship and the closed condition of the factory further supported grant of interim relief.

Conclusion: Waiver of pre-deposit was granted and stay was allowed in favour of the appellant.

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