Packaging material treatment upheld for printed aluminium foil used in in-house packing after limited job-work.

Printed aluminium foil sheets, already duty paid and marked with the assessee's brand and product particulars, were treated as packaging material rather than as mere raw material. Because the job-work was limited to cutting the sheets into pieces and the assessee then folded them into tucks in its own factory for use as the outer container of razor blades, the material was held to fall within the packaging process connected with the specific product. On those facts, Modvat credit and removal under Rule 57F(2) were available, and the departmental circular on raw materials for making packaging materials did not apply.

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Issues: Whether printed aluminium foil sheets, sent to job-workers only for cutting into individual pieces and thereafter used in the assessee's automatic packing process, could be treated as packaging material/input eligible for Modvat credit and removal under Rule 57F(2) of the Central Excise Rules, 1944.

Analysis: The aluminium foil sheets were already duty paid, printed with the brand name and other particulars of the assessee's product, and the job-work carried out on them was confined to cutting the sheets into pieces. The actual packing of razor blades was done in the assessee's own factory, where the cut pieces were folded into tucks and used as the outer container. On these facts, the material was used as packaging material connected with the assessee's specific product, and the departmental circular dealing with raw materials for making packaging materials did not apply.

Conclusion: The aluminium foil sheets were correctly treated as packaging material for the assessee's product and were eligible for the benefit claimed; the appeal was rightly rejected.

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