2003 (11) TMI 385 - AT - Central Excise

Summary

Issues: Classification of goods and differential duty payable, Availability of Modvat credit

Classification of Goods and Differential Duty Payable:
The appeal was filed against an order-in-appeal that upheld the order-in-original regarding the classification of goods (HDPE) manufactured by the appellants and the differential duty payable by them. The Board changed the classification of the goods from Chapter sub-headings 5406.90, 5408.00, and 6301.00 to 3926.90 and 3920.32 through a Circular issued under Section 37B of the Act for uniformity. The appellants were asked to pay a differential duty, which they disputed. The Tribunal noted that the change in classification could only be effective from the date of the Board Circular, not retrospectively. Citing a precedent, the Tribunal ruled that the differential duty was payable by the appellants from the date of the Circular until the date mentioned in the show cause notice, not from the earlier date as demanded.

Availability of Modvat Credit:
The appellants claimed entitlement to Modvat credit on inputs used in manufacturing the goods. The Tribunal considered that the appellants had not followed the procedure for claiming Modvat credit, but every assessee has a statutory right to claim it if permissible under the law/rules. The Tribunal held that the adjudicating authority should examine the availability of Modvat credit before determining the final differential duty payable by the appellants. Referring to a previous case, the Tribunal emphasized that the appellants should not be deprived of claiming Modvat credit merely because they did not assert the claim initially. The impugned order was modified, and the differential duty would be calculated considering any Modvat credit applicable to the appellants under the relevant law/rules.

In conclusion, the Tribunal modified the Commissioner (Appeals) order, directing the differential duty to be recalculated, taking into account any Modvat credit available to the appellants. The appeal was disposed of accordingly.