2009 (10) TMI 603

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....clay" used captively in the manufacture of pencil lead would amount to "manufacture". Original authority classified "mixture of graphite and clay" under Chapter Heading No. 68151020 of the Schedule to the Central Excise Tariff Act, 1985 and confirmed demand of duty along with interest and also imposed penalty. Commissioner (Appeals) upheld the adjudication order. 3. The learned Senior Advocate on behalf of the appellant submits that "mixture of graphite and clay" is used captively in the manufacture of pencil lead and further used in the manufacture of pencils. He submits that "pencil lead" and "pencils" classifiable under Chapter 96 of the Tariff Schedule attract 'Nil' rate of duty. He submits that "mixture of graphite and clay" ha....

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....ill withdrawal of the said notification. Therefore, the duty demanded on the "mixture of graphite and clay" after withdrawal of the exemption notification is correct. He also submits that "mixture of graphite and clay" is known in the market and, therefore, it is marketable. He contended that the selling of the goods is not relevant. The question is whether the goods are marketable? He submits that, in the present case, the mixture is marketable but the appellant used captively and, therefore, they are liable to pay duty. 5. After hearing both sides, and on perusal of the records, it is revealed from the order of the Commissioner (Appeals) that the "mixture of graphite and clay" is not bought or sold in the market. The ld. Advocate ....