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TMI Blog1991 (2) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise, Dugrapur Central Excise Divison disallowing Modvat credit on duty paid HDPE granules used in the manufacture of Blow Moulded Tubes (Lay Flat) used for packing their final product Slurry Explosives. It was held in the impugned Order-in-Appeal that the HDPE granules are raw materials for packaging material and not packaging material and that Modvat credit on packaging material is admissible only if the packaging material is brought into the manufacturer s premisses in a ready-to-use condition. 3. Shri S.N. Sinha Mahapatra, learned Counsel for the appellants argued their case. He submitted that an identical issue had been decided by this Bench vide order No. A 619 620/Cal/1991 dated 25-9-1991 in Appeal Nos. E-96/91 and Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterials. The present case has been disposed of by the lower authorities placing an exaggerated and unjustified emphasis on packaging materials. The main criterion for deciding the admissibility of modvat credit is whether the goods in question are used in or in the relation to the manufacture of the final product. Whether the goods are packaging materials or raw materials for packaging materials is an issue which is secondary. In the present case such an issue is even irrelevant. In the impugned Order-in-Appeal it is stated that the appellants had contended that the Blow Moulded Tubes are identifiable integral part of the final product Slurry Explosives. This product cannot come into existence without being held in the said Tubes which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing held in position in the Tubes. The Tubes are an integral part of the explosives till everything disintegrates after a blasting operation. The packaging materials referred to in the Explanation Clause of Rule 57A are containers like cartons, tins etc. which are used to pack the contents and which have distinct existence and utility apart from such contents. After the contents are removed or used the containers still exist and are identifiable. They can be reused or used for packing other goods. The Blow Moulded Tubes in question do not have a separate existence distinct from the explosives. The HDPE granules used for the production of the said tubes which are used for packing the explosives which are present in the final product and are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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