Classification and dutiability of 'leiee paste' manufactured in Biri factories for captive use as a gum substitute for sticking tissue paper (Jhilli) and labels of biri kattas (smallest retail pack) - Regarding - Central Excise - 128/1/86-CX.3

Classification and dutiability of 'leiee paste' manufactured in Biri factories for captive use as a gum substitute for sticking tissue paper (Jhilli) and labels of biri kattas (smallest retail pack) - Regarding F. No. 128/1/86-CX.3 Dated 3-3-1987 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Classification and dutiability of 'leiee paste' manufactured in Biri factories for captive use as a gum substitute for sticking tissue paper (Jhilli) and labels of biri kattas (smallest retail pack) - Regarding. A doubt has been raised as to whether 'leiee paste' manufactured out of wheat flour/maidas sago, tamarind seed powder, copper sulphate etc. for captive consumption in biri factories as an adhesive for sticking tissue paper (Jhilli) and labels of Biri Kattas (smallest retail pack) should be considered excisable under the Schedule to the Central Excise Tariff Act, 1985. It is reported that the product loses its adhesive property after 36 hours from the time of its preparation and becomes completely unusable. The product is reportedly only captively consumed and not sold. 2. In so far as the question of excisability of such 'leiee paste' is concerned, the matter has been examined by the Board in the light of Supreme Court 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 'leiee paste' which is prepared in biri factories for captive use as an adhesive for sticking tissue paper (Jhilli) and labels of biri kattas (smallest retail pack) is not an article which ordinarily comes to the market to be bought and sold and is reported to be only captively consumed within the biri factories. Further it is reported that 'leiee paste' loses its adhesive property after 36 hours from the time of its preparation and becomes completely unusable. Hence, it is not also capable of being sold. 3. Accordingly, the Board is of the view 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 pack) may not appropriately come within the meaning of 'goods' for the purpose of charging excise duty. 4. All pending assessments should be decided on above basis.