1999 (4) TMI 316

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.... APCL were preparing aluminium paint by mixing non-duty paid aluminium powder with the turpentine and varnish and the prepared paint was used captively for coating drums used for packing of aluminium powder within the factory itself. In the show cause notice dated 12-4-1991, the Central Excise Duty of Rs. 4,030.36 in respect of aluminium powder and of Rs. 10,843.20 in respect of aluminium paint was demanded. The appellants agreed to pay the central excise duty due on aluminium powder. With regard to the diluted aluminium paint, it was contended that it could not be marketed and had a very short shelf life. It was their plea that such prepared diluted aluminium paint was not dutiable. The Addl. Collector of Central Excise, Madurai, held that....

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....ed that the aluminium paint is a well recognised commodity and had wide use. It is bought and sold in the market and was required to discharge the duty liability before use. 4. We have carefully considered the matter. The appellants had accepted their duty liability to pay central excise duty on the aluminium powder captively consumed for the preparation of diluted aluminium paint. The central excise duty demanded had already been paid. The only issue for our consideration is the demand of central excise duty with regard to the diluted aluminium paint. The appellants had submitted that in the process of manufacture of aluminium powder, certain floor sweepings are obtained. They had used such aluminium powder floor sweepings to prepare....