Cenvat credit on detergent cake in combined retail packs: prima facie manufacture supported waiver of pre-deposit and stay.

Packing detergent cake and detergent powder together in a pouch for sale at MRP was treated as prima facie manufacture through packing and repacking of goods notified in the Third Schedule. On that interim basis, the appellant was found to have an arguable claim to Cenvat credit on the duty paid on detergent cake, and the Tribunal granted waiver of pre-deposit and stayed recovery of the disputed dues pending appeal. The Revenue authorities cited were not regarded as conclusive because the effect of the relevant provisions had not been examined in those cases.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery in view of the prima facie eligibility for Cenvat credit on duty paid on detergent cake used in a combined pack.

Analysis: The appellant packed detergent cake and detergent powder together in a pouch and sold the combined product with MRP. The prima facie case rested on Section 2(f)(iii), under which packing and repacking of goods notified in the Third Schedule amounts to manufacture. On that basis, the Tribunal found, at the interim stage, that the combined product attracted the statutory definition of manufacture and that the appellant appeared eligible to claim credit on the duty paid on detergent cake. The authorities cited by Revenue were not treated as decisive because the effect of these provisions had not been examined in those cases.

Conclusion: Waiver of pre-deposit was granted and recovery of the disputed dues was stayed during pendency of the appeals.

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