Manufacture by wheat processing supports interim relief, with pre-deposit waived and recovery stayed pending appeal.

Milling or grinding wheat into maida, suji, atta and bran was treated as prima facie manufacture because the process converted the raw material into distinct wheat products falling under different tariff chapters and changed the character of the goods. Relying on earlier departmental and tribunal material, as well as an identical prior ruling, the Tribunal found the demand not sustainable at the interim stage. It therefore waived pre-deposit of tax, interest and penalty and stayed recovery pending disposal of the appeal.

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Issues: Whether the milling or grinding of wheat into maida, suji, atta and bran amounted to manufacture for the purpose of levy and, on that basis, whether pre-deposit of tax, interest and penalty should be waived and recovery stayed pending appeal.

Analysis: The Tribunal noted earlier departmental and tribunal material indicating that conversion of wheat into wheat products was viewed as manufacture, and that wheat and wheat products fell under different tariff chapters. It also relied on the view that the process changed the character of the raw material and on the earlier decision granting relief on an identical issue. On that basis, the Tribunal found that the demand was, prima facie, not sustainable for the purpose of interim relief.

Conclusion: The appellant was granted waiver of pre-deposit of tax, interest and penalty, and recovery was stayed till disposal of the appeal.

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