Central Excise - Excisability of 'composition for match-heads' and 'side painting liquid' - Doubts regarding - Clarification thereon - Central Excise - 13/88-CX.3

Central Excise - Excisability of 'composition for match-heads' and 'side painting liquid' - Doubts regarding - Clarification thereon Circular No. 13/88-CX.3 Dated 20-6-1988 [From F. No. 108/2/88-CX.3] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Excisability of 'composition for match-heads' and 'side painting liquid' - Doubts regarding - Clarification thereon. Certain doubts had been raised as to whether the products known as 'composition for match-heads' and 'side painting liquid' captively consumed in match units could be treated as excisable goods. It has been represented that the said goods are neither marketed nor marketable. Such goods reportedly arise only in the stream of continuous process of manufacture of matches. It has also been stated that these raw materials/ingredients for matches must be applied within the space of a couple of hours to the splint/match box while those are in wet condition. If such application is not done within this time, the ingredients harden and become useless. 2. The matter has been examined in Board's office in consultation with the Dy. Chief Chemist, CRCL, New Delhi. The Dy. Chief Chemist has reported that 'composition for match heads' consists of potassium chlorate and potassium bichromate ground to a slurry with glue solution. Manganese dioxide, glass powder, sulphur and carbon black are separately mixed in the glue solution and ground to a slurry. 'Side painting liquid' consists of red phosphorus, antimony oxide and ground glass in glue solution. Thus both the products are in the form of a heterogeneous slurry of several compounds in glue solution. Shelf life of such products is limited and, therefore, the products are consumed by the match factories within a specified period of time. 3. In this connection, attention of the Board has been drawn to the Board's instructions contained in their F. No. 128/1/86-CX.3, dated 3-3-1987 . It was decided therein that 'leiee paste' which is prepared in biri factories from raw materials like wheat flour/maida, sago, tamarind seed powder, copper sulphate etc. and used within such factories as an adhesive for sticking tissue paper (Jhilli) and labels of biri kattas (smallest retail packs) may not appropriately come within the meaning of 'goods' for the purpose of charging excise duty. This decision was taken by applying the ratio of Supreme Court's judgment in the case of M/s. Union Carbide India Limited v. Union of India and Others in Civil Appeal No. 1103 of 1972, decided on 4-4-1986. The Board is of the view that the decision taken vide Board's F. No. 128/1/86-CX.3, dated 3-3-1987 in the case of 'leiee paste' should also apply in respect of the above-mentioned 'composition for match heads' and 'side painting liquids'. 4. Trade interests may also be suitably informed. 5. All pending assessments may be finalised on the above basis.