Tribunal Grants Waiver for Packaged Drinking Water Manufacturing, Applicant Not Bound by Institutional Consumer

The Tribunal granted the applicant a waiver of pre-deposit of duty, interest, and penalty related to the manufacturing of packaged drinking water. The decision was based on the finding that the applicant was not manufacturing on behalf of an alleged institutional consumer but independently producing and supplying the goods. The Tribunal ruled in favor of the applicant, allowing the stay petition and waiving the dues.

---

---

Issues:
Waiver of pre-deposit of duty, classification of buyer as institutional consumer, manufacturing on behalf of buyer, sustainability of demand.

Analysis:
The applicant sought waiver of pre-deposit of duty, interest, and penalty related to the manufacturing of packaged drinking water under Section 4A of the Central Excise Act. The Revenue contended that the goods were liable to duty under Section 4 due to clearance to an alleged institutional consumer, M/s. Amalgamated Bean Coffee Trading Co. (ABCTC). The applicant argued that ABCTC, engaged in coffee and snack bars, cannot be considered an institutional consumer and that they are not manufacturing on behalf of ABCTC but on a job work basis.

The Revenue claimed that the applicant was manufacturing on behalf of ABCTC as the preform supplied by ABCTC was used to produce bottles filled with mineral water, which were then supplied back to ABCTC. However, upon examination, it was found that the applicant purchased raw materials from the market for manufacturing packaged drinking water, which was then sold to ABCTC for further distribution to customers. Consequently, the Tribunal agreed with the applicant's stance that ABCTC is not an institutional consumer, leading to the waiver of the dues. The Tribunal granted total waiver of pre-deposit and stayed the recovery during the appeal, thereby allowing the stay petition.

In conclusion, the Tribunal ruled in favor of the applicant, granting a waiver of pre-deposit of duty, interest, and penalty. The decision was based on the finding that the applicant was not manufacturing on behalf of an institutional consumer, as contended by the Revenue, but rather independently producing and supplying packaged drinking water to ABCTC for onward sale to customers.

---