Job-work manufacture dispute: supplier of packing materials was not treated as manufacturer, securing full waiver of pre-deposit.

In a dispute over manufacture through job-workers, the Tribunal held that manufacture depends on who converts inputs into a new product with a distinct name, character and use. On the facts, packaged mineral water was manufactured by the job-workers, and supplying bottles, preforms, caps and packing materials did not by itself make the appellant the manufacturer. The appellant was not treated as the manufacturer merely because the job-workers could not freely market the goods or because Notification No. 214/86-CE was not followed in the manner alleged by the department. Complete waiver of pre-deposit and stay against recovery was therefore granted.

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Issues: Whether the appellant had made out a prima facie case for complete waiver of pre-deposit and stay against recovery in a dispute on liability arising from manufacture through job-workers.

Analysis: The appellant's case was that the job-workers were the actual manufacturers and that supply of bottles, preforms, caps and other packing materials by the appellant did not make it the manufacturer. The Tribunal noted that the question of manufacture turns on who converts the input into a new product with a distinct name, character and use. On the facts, packaged mineral water was manufactured by the job-workers, and there was no legal basis to treat the appellant as the manufacturer merely because the job-workers could not freely market the goods or because Notification No. 214/86-CE was not followed in the manner suggested by the department.

Conclusion: The appellant established a case for complete waiver of pre-deposit and stay against recovery was granted.

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