Printing on Polyester Film Deemed Manufacturing: Appellant Entitled to Input Credit

The Tribunal held that the printing and laminating of plain polyester film by the appellant constituted manufacturing. The activity of printing/laminating BOPP films for biscuit wrappers was also considered manufacturing. Relying on legal precedents and the transformative nature of the process, the Tribunal concluded that the appellant was entitled to credit on inputs used in the process. The impugned proceedings were deemed unwarranted, and the appeal was allowed with consequential relief.

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Issues:
1. Whether the activity of printing and laminating of a plain polyester film amounts to manufactureRs.
2. Whether the printing/laminating of BOPP films used as laminated wrappers for packing biscuits constitutes manufactureRs.

Analysis:

Issue 1:
The appeal revolved around the question of whether the printing and laminating of a plain polyester film by the appellant constituted manufacturing. The Revenue contended that since this process did not amount to manufacture, no excise duty was payable on the printed wrappers supplied to contract manufacturing units. The appellant argued that based on a Supreme Court decision and precedents, the activity should be considered as manufacturing. The Tribunal analyzed the facts and held that the printing/laminating of BOPP films for packing biscuits did indeed amount to manufacture. Consequently, the appellant was entitled to avail credit on inputs used for the process, and the impugned proceedings were deemed unwarranted.

Issue 2:
Drawing parallels from a similar case before the apex court involving the printing of GI paper, the Tribunal examined whether the printing/laminating of BOPP films as wrappers for biscuits constituted manufacture. The apex court had outlined four categories to determine if a process amounts to manufacturing. Upon scrutiny, the Tribunal found that the printing process transformed the paper into a product with distinct character and use, making it marketable for a specific purpose. Therefore, the Tribunal concluded that the printing/laminating activity in question fell under the category where manufacturing of goods could be said to take place. Consequently, the appellant's credit on inputs used in the process was deemed valid, leading to the setting aside of the impugned order and allowing the appeal with any consequential relief.

This comprehensive analysis of the judgment highlights the key legal issues, arguments presented by both sides, relevant legal precedents, and the Tribunal's detailed reasoning leading to the final decision in favor of the appellant.

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