Packing material credit for hanging cards was allowed where their value formed part of the final product clearance.

Hanging cards used to attach and fold blade packets were treated as packing material for Modvat purposes because they formed part of the ordinary mode of clearance and their value was included in the value of the final blades. On that factual basis, credit under Rule 57B(l)(ii) was available, and the Revenue's classification objection did not displace the credit eligibility issue. The same reasoning supported unconditional waiver of the predeposit requirement, as the packing-material character of the cards and the inclusion of their value were not rebutted.

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Issues: Whether the hanging cards used to attach and fold blade packets qualified as packing material so as to permit Modvat credit and justify unconditional waiver of predeposit.

Analysis: Credit under Rule 57B(l)(ii) was available where packing material formed part of the final product value. The hanging cards were used in the ordinary mode of clearance, the value of the cards was included in the value of the blades, and this factual position was not rebutted. The classification dispute suggested by the Revenue did not displace the relevant question of credit eligibility on packing material used in clearance.

Conclusion: The hanging cards were treated as packing material eligible for Modvat credit, and the appellant was held entitled to unconditional stay of the predeposit requirement.

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