Manufacture through printing and packing of PP sacks supports small-scale exemption under the transformation test.

Printing customer names on PP bags or sacks, coupled with packing activities at the assessee's premises, was treated as more than a mere printing exercise on a finished product. Applying the principle that manufacture arises where processing brings about a transformation giving the article a distinct character and commercially relevant use, the analysis distinguished the Revenue's earlier precedent as inapplicable on its facts. On that reasoning, the activity was regarded as manufacture for exemption purposes, and the assessee was stated to be entitled to small-scale industry exemption under Notification No. 8/2003-CE.

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Issues: Whether printing customer names and packing of PP bags or sacks received from a job worker amounted to manufacture so as to entitle the assessee to small-scale exemption under Notification No. 8/2003-CE.

Analysis: The activity on the assessee's premises was not limited to printing customer names, but also included packing of the sacks. The earlier decision relied on by Revenue was held inapplicable because the process here was not a mere printing exercise on an already finished product. The earlier Supreme Court ruling on similar printing activity was applied to hold that manufacture arises when a process brings about a transformation giving the article a distinct character and use, and the end use changes in a commercially relevant manner. On that reasoning, the assessee's activity fell within the scope of manufacture for exemption purposes.

Conclusion: The assessee was entitled to the benefit of SSI exemption, and the Revenue's appeal was not sustainable.

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