Subject :Excisability of intermediate products such as binder/resin/glues used in the manufacture of particle boards.

This is with reference to manufacture of particle boards (plain and pre-laminated) made from sugarcane bagasse and other agricultural wastes. during the process of manufacture specially developed binders and mixed with the agricultural residues like dried sugarcane bagasse. These binder/resin/glues are specifically developed and made by the industry only for captive consumption and not for external sale. These binders have a very short shelf life of a few hours only and can neither be bottled nor transported nor stored for long.

2. A doubt has been raised regarding excisability of such binder/resin/glues.

3. In this context, your attention is drawn to the Supreme Court judgement in the case of Moti Laminates Pvt. Ltd. vs. Collector of Central Excise, Ahmedabad [1995(76)ELT 241 (SC)] wherein it was held that intermediate goods produced and used for captive consumption were not liable to duty, if not marketable, notwithstanding the fact of their being specified in Tariff Schedule.

4. All pending disputes/assessments on the issue may be settled in the light of these guidelines.