Manufacture for export schemes construed broadly as waiver of pre-deposit and stay granted in a duty demand dispute.

Packing compact discs in jewel boxes in an export processing zone was treated as an export-oriented activity undertaken under the prescribed permissions, and the interim view was that the CBEC circular had persuasive value in supporting a broader understanding of manufacture for export schemes. The order noted that the meaning of manufacture for export purposes was not confined strictly to Section 2(f) of the Central Excise Act. On that basis, the applicant showed a sufficient prima facie case at the stay stage, and waiver of pre-deposit was granted with recovery of the duty demand stayed pending appeal.

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Issues: Whether the applicant was entitled to waiver of pre-deposit and stay of recovery in relation to the duty demand on clearances of compact discs from the export processing zone.

Analysis: The demand arose from the view that packing compact discs in jewel boxes did not amount to manufacture. The order notes that the activity was undertaken in an export-oriented setting under permissions granted through the prescribed official process, and that the CBEC circular, though issued in the context of a different notification, clarified a broader understanding of manufacture for export schemes and had persuasive value. The circular was treated as supporting the proposition that the meaning of manufacture for export purposes is not confined strictly to Section 2(f) of the Central Excise Act, and this was considered sufficient at the interim stage to assess the strength of the applicant's case.

Conclusion: Waiver of pre-deposit was granted and recovery of the duty demand was stayed during the pendency of the appeal, in favour of the assessee.

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