VAT Set off/refund

A Merchant Exporter purchases tax-free(textile fabrics), processes it and exports it out of India. He paid VAT on Packing-Materials. 

How a merchant exporter can process ?? for processing he has to own a factory or use another facotry for processing ........please be clear while posting ..........

He has to obtain tax free packing materials also, showing the same required for packing and making amendment in RC. 

Now the querry is CAN INPUT VAT ON PACKING MATERIALS BE SET-OFF AGAINST DEPB LICENCE SALES OR SHOULD THE DEALER CLAIM REFUND FROM THE SALES TAX DEPARTMENT?

if the packing materials are specified in his shipping bill/ export invoice/ packing list, to establish that these were used exclusive for export, he can take input credit and can utilize the same to his vat liability or claim refund at year end. 

He has to establish that these packing materials were exported along with  textiles, in absence of such evidence, the same would not qualify. 

Also, if VAT on Packing-Materials is not claimed as refund/set-off in original return, do we have to REVISE the return before submitting FORM-704(VAT AUDIT REPORT)?