Broad interpretation of "fabric" excludes plastic woven sacks from Modvat credit eligibility under Rule 57A.

High density polyethylene woven sacks used for packing chemicals were treated as excluded from Modvat credit under the Rule 57A exclusion clause because they were bags or sacks made out of fabric, including material woven from plastic strips. The term "fabric" was construed broadly and was not confined to textile material. On that interpretation, the sacks fell within the excluded category and were not eligible inputs for Modvat credit.

---

---

Issues: Whether high density polyethylene woven sacks used for packing chemicals were excluded from Modvat credit as inputs under the exclusion clause in Rule 57A of the Central Excise Rules, 1944 on the ground that they were bags made out of fabric or plastic.

Analysis: The exclusion clause in sub-rule (1) of Rule 57A expressly covered bags or sacks made out of fabric, including those woven from strips obtained from plastic. The term "fabric" was construed in a broad sense and not confined to textile material alone. On that interpretation, the sacks used by the appellant fell within the excluded category and could not be treated as eligible inputs for Modvat credit.

Conclusion: The claim for Modvat credit was rejected and the appeal failed.

---