K.S. Venkataramani, Member (T)

1. This appeal is directed against the order dated 29.1.1987 passed by the Collector of Central Excise (Appeals), Madras, and by which he had upheld the order of the Assistant Collector of Central Excise, Madras V Division, dated 18.7.1986, holding that the appellants were not eligible for availing MOD-VAT credit 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 for manufacture of the packing materials. The packing materials which are exempted are brought back to the