Manufacture by repacking and relabelling of battery operated bikes supports only conditional stay, not full waiver of pre-deposit.

Packing, repacking and relabelling are treated as manufacture under Section 2(f)(iii) of the Central Excise Act only for goods covered by the Third Schedule, so the key question was whether battery operated bikes fell within the automobile category. By applying the ordinary automobile classification reference used in the text, such bikes were considered at least prima facie to be automobiles, which meant the appellants could not establish a prima facie case for complete waiver of pre-deposit. Conditional stay was therefore appropriate, and a partial deposit was directed as a condition for suspension of recovery pending disposal of the appeals.

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Issues: Whether the activity of packing, repacking and relabelling of battery operated bikes amounted to manufacture for the purpose of the Third Schedule to the Central Excise Act, 1944, and whether the appellants had made out a prima facie case for complete waiver of pre-deposit.

Analysis: The expression "manufacture" under Section 2(f)(iii) of the Central Excise Act, 1944 covers packing, repacking, labelling, relabelling and similar treatment only in relation to goods specified in the Third Schedule. The relevant question, therefore, was whether battery operated bikes could be treated as automobiles falling within the specified category. By reference to the definition of automobile in the Automobile Cess Rules and the classification in Heading 7 of the First Schedule to the Industries (Development and Regulation) Act, 1951, vehicles such as motor cycles, scooters and similar transport vehicles were treated as automobiles. On that basis, battery operated bikes were considered, at least prima facie, to fall within the automobile category. Since the appellants did not establish a prima facie case for complete waiver, conditional relief was warranted.

Conclusion: The appellants were not entitled to full waiver of pre-deposit, and a deposit of Rs. 30,00,000 was directed as a condition for stay of recovery of the remaining dues and penalties pending disposal of the appeals.

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