TMI Blog1987 (10) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ft on PVC, LDPE, HDPE and Polypropylene and consequently being ineligible to operate under Rule 57F(2) of the Central Excise Rules relating to MODVAT. 2. The appellants herein sought permission for taking MODVAT on HDPE etc. used in the manufacture of plastic jars etc. which are used for packing the excisable goods manufactured by the appellants viz. Shampoo, Talcum Powder, Cream, etc. The raw materials which are used for manufacture of the jar viz:. HDPE etc. fall under Chapter 39 and the inputs of the appellants viz. packing materials fall under Chapter 39 while the final products Shampoo, Talcum Powder fall under Chapter 33 of the Central Excise Tariff Act The appellants are purchasing the raw materials and sending them to processors f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tc. manufactured therefrom has necessarily to be set off only against the duty payable on the final products which ace cosmetics and toilet preparations. According to him Rule 57F specifically provides to situations which are not covered by Rule 57D(2) relating to intermediate products. Further Rule 57A which spells out the applicability of MODVAT gives the expression that duty paid on goods used in or in relation to manufacture of final products and the expression in relation to manufacture is wide enough to cover the claim of the appellant for MODVAT benefit when the inputs are clearly shown to be used in the manufacture of the final products. He referred to the definition of the term manufacture in Section 2(f) of the Central Excises a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E etc. are not utilised in the factory of the appellant for manufacture of plastic jars. These are purchased from outside and are being sent to processors by the appellant for manufacturing packing material which again are exempted. It was the contention of the learned S.D.R.that the HDPE, LDPE etc. cannot be considered as inputs in or in relation to the manufacture of cosmetics, and, on this reasoning, the provisions of Rule 57A are not attracted at all. 5. The submissions made by both the sides herein have been carefully considered. It is found that the raw materials HDP LDRE etc. are purchased from outside by the appellant who are not themselves manufacturing the plastic jars and other containers in their own factory, but are getting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s returned is the packaging, materials which are themselves finished products exempted from duty and which cannot appropriately be considered as intermediate products which .have to, undergo further processing before being used in the manufacture of final products. This is what is envisaged under Rule 57F(2). In the situation such as this, since the plastic jars and other packaging materials are themselves exempted, it cannot also be stated that there is a cascading effect of the duties. In such a situation, the conclusion of the lower authorities that HDPE, LDPE etc. finding used in the manufacture of plastic caps, jars, cannot be considered as input in or in relation to the manufacture of the appellants final products viz, cosmetics and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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