Central Excise - Excisability of coating solution/coating paste - Regarding - Central Excise - 51/89

Central Excise - Excisability of coating solution/coating paste - Regarding Circular No. 51/89 Dated 5-9-1989 [From F. No. 126/4/89-CX.3] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Central Excise - Excisability of coating solution/coating paste - Regarding. A doubt had been raised as to whether coating solution/coating paste prepared by the paper mills for captive consumption in the manufacture of papers could be treated to be excisable goods or not. Such coating solution/coating paste is reportedly prepared in the paper mills from out of raw materials like china clay, calcium carbonates, titanium oxide, casein starch, acrylic emulsion, certain dyes, resins, oils, solvents plasticised pigments etc. After the churning/mixing of these raw materials, the 'coating solution/coating paste' emerges. Such 'coated solution/coating paste' has a very limited shelf-life and has to be captively used immediately after the completion of their preparation in the process of manufacture of papers. Such 'coating solution/coating paste' is reportedly not marketed. Since such-coating solution/ coating paste' is not marketed, it could be viewed in the light of the Hon'ble Supreme Court's order in the Union Carbide case and the Bhor Industries Ltd.s' case that such coating solution/coating paste' as mentioned above, would not come within the meaning of 'excisable goods'. The above guidelines may be brought to the notice of the lower field formations and the trade interest may also be suitably advised. All pending assessments may be finalised on the above basis