Capital goods credit for printing machinery used to make packaged goods marketable through mandatory wrapper labelling requirements.

An inkjet printing machine combined with a rewinding machine used to print mandatory particulars on soap wrappers qualified as capital goods under Rule 57Q of the Central Excise Rules, 1944. The machine printed date of packing, price and other compliance details required under the Standards of Weights and Measures Act, 1976 and the Packaged Commodity Rules, 1977, making the soap marketable only after such printing. A process that renders goods marketable and is incidental or ancillary to manufacture falls within manufacture for excise purposes, and the stage of the process is not decisive. Credit was therefore allowable and denial of credit was not sustainable.

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Issues: Whether the inkjet printing machine combined with the rewinding machine used for printing particulars on soap wrappers was eligible as capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The machine was used to print mandatory particulars such as date of packing and price on soap wrappers, which were required under the Standards of Weights and Measures Act, 1976 and the Packaged Commodity Rules, 1977. Soap could not be lawfully marketed without compliance with these printing requirements. An used to render goods marketable and to carry out an operation incidental and ancillary to manufacture falls within the scope of manufacture for excise purposes, and the stage at which the process occurs is not decisive.

Conclusion: The machine qualified for capital goods credit under Rule 57Q, and denial of credit was not sustainable.

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