Prima facie manufacture test in pleating of fabrics led to partial waiver of pre-deposit and stay of recovery.

In a stay application over duty demand on pleating of fabrics, the Tribunal considered whether the process prima facie amounted to manufacture under the tariff note. It noted that the pleating appeared temporary and capable of removal by washing and mild ironing, and that the trade notice then in force prima facie supported the applicant's position. On that basis, the Tribunal granted only partial waiver of pre-deposit, requiring a reduced deposit as a condition for stay of recovery of the balance demand.

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Issues: Whether, in a stay application concerning demand of duty on pleating of fabrics, the applicant was entitled to waiver of pre-deposit and stay of recovery, in view of the prima facie position on whether the process amounted to manufacture under the tariff note.

Analysis: The materials placed indicated that the pleating process may be temporary in nature and removable by washing and mild ironing. The earlier trade notice in force during the relevant period also prima facie supported the applicant's stand. On that basis, the Tribunal found it appropriate to grant only partial relief by directing a reduced deposit as a condition for suspension of recovery.

Outcome: Waiver of pre-deposit was granted in part, subject to a deposit of Rs. 1 lakh, and recovery of the remaining demand was stayed on compliance.

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