Packaging material classification for hanging cards used with razor blades allowed MODVAT credit, not advertising treatment.

Hanging cards used with razor blades were treated as packaging material, because they were used to pack and clear the blades with the product and their printed design did not alter that essential character. The Tribunal's view that the cards, though displayed in shops and carrying product reproduction, remained part of the packing and that their cost formed part of the assessable value was upheld. MODVAT credit was therefore admissible on the cards under Rule 57B, and the Revenue's reliance on an earlier Tribunal decision was rejected as factually inapplicable.

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Issues: Whether hanging cards used for packing razor blades were advertising materials or packaging materials, and whether MODVAT credit was admissible on their cost under Rule 57B of the Central Excise Rules.

Analysis: The hanging cards were used to pack and clear the blades together with the product, and the printed design on the cards did not change their essential character as packing material. The Tribunal's view that such cards, though displayed in shops and carrying product reproduction, remained part of the packing and that their cost formed part of the assessable value was accepted. The earlier Tribunal decision relied on by the Revenue was found inapplicable on its facts.

Conclusion: The hanging cards were packaging materials and not advertising materials, and MODVAT credit was admissible. The appeal was therefore without merit and the Tribunal's order called for no interference.

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