Printing and shrink-sleeving of exported bottles treated as manufacture, supporting CENVAT credit and remand for fresh examination.

Printing and shrink-sleeving of Chapter 70 bottles was treated as manufacture because Note 6 to Chapter 70 deems printing, decorating or ornamenting of the specified goods to be manufacturing activity. On that basis, the exported goods were regarded as manufactured goods cleared under Rule 19, and the assessee was held eligible in principle for CENVAT credit on inputs used in their production under Rule 2(h). As the lower authorities had not examined the alternative factual aspect of the process in full, the matter was remanded for fresh consideration by the original authority.

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Issues: Whether the goods exported after printing and shrink-sleeving of bottles amounted to manufacture so as to entitle the assessee to CENVAT credit on inputs used for their production, and whether the matter required remand for fresh decision.

Analysis: The exported bottles fell under Chapter 70, and Note 6 of Chapter 70 of the First Schedule to the Central Excise Tariff Act, 1985 provides that in relation to goods of the specified headings, the process of printing, decorating or ornamenting amounts to manufacture. On that basis, the exported goods were treated as manufactured goods cleared under Rule 19 of the Central Excise Rules, 2001, and the assessee was held eligible in principle for CENVAT credit on inputs used in their manufacture under Rule 2(h) of the CENVAT Credit Rules, 2004. However, the alternative factual aspect had not been examined by the lower authorities, and the nature of the process required fresh consideration.

Conclusion: The assessee was held entitled in principle to CENVAT credit on the exported manufactured goods, but the matter was remanded to the original authority for fresh decision.

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