Prima facie manufacture of rough castings excluded Business Auxiliary Service and supported waiver of pre-deposit during appeal.

Machining, drilling, tapping and milling of rough castings were treated on a prima facie basis as manufacture, so the activity was not classifiable as Business Auxiliary Service for the interim stay request. On that same preliminary view, the claim to exemption under Notification No. 8/2005-ST was not accepted at this stage. As the assessment was confined to waiver proceedings, pre-deposit was waived and recovery of the disputed dues was stayed pending disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery on the prima facie view that the processes undertaken on rough castings amounted to manufacture and were not taxable as Business Auxiliary Service, and whether exemption under Notification No. 8/2005-ST was available.

Analysis: The processes of machining, drilling, tapping and milling were treated, at the interim stage, as amounting to manufacture on the strength of cited precedents. On that prima facie view, the activity could not be classified as Business Auxiliary Service. The claim for exemption was also not accepted at this stage, but the overall assessment remained only prima facie for deciding the stay request.

Conclusion: Pre-deposit was waived and recovery of the disputed dues was stayed during pendency of the appeal.

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