Prima facie no manufacture in cutting and stitching operations justified waiver of pre-deposit and stay of recovery.

Prima facie entitlement to interim relief was found where cutting and stitching of the materials in question was relied on as not amounting to manufacture, and comparable classification disputes had already been decided in favour of the assessee. On that basis, the duty demand and penalties were treated as fit for protection pending disposal of the appeals, and waiver of pre-deposit was granted together with stay of recovery during the pendency of the appeals.

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Issues: Whether the applicants were entitled to waiver of pre-deposit and stay of recovery of duty and penalties during the pendency of the appeal.

Analysis: The applicants showed a prima facie case by relying on decisions holding that cutting and stitching of materials of the type involved did not amount to manufacture and that the classification issue had been decided in favour of the assessee in comparable matters. On that basis, the demand and penalties were considered fit for interim protection pending disposal of the appeals.

Conclusion: Waiver of pre-deposit of the entire duty and penalties was granted and recovery of the duty and penalties was stayed during the pendency of the appeals.

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