2004 (5) TMI 378 - AT - Central Excise

Summary

Issues: Classification of 'Plastic Satranj' product and confirmation of duty demand.

Classification of 'Plastic Satranj' Product:
The appellants manufactured 'Plastic Satranj' and initially classified it under Charter sub-heading 3922.90 of the CETA, claiming duty exemption under Notification No. 132/86-C.E. Later, they reclassified it under Chapter 39, but only provisionally approved under sub-heading 4601.00 of Chapter 46. The issue was whether the correct classification should be effective from the date of the Board's Circular on 16-6-1987 or earlier. The Tribunal held that the product was always classifiable under Chapter 46, and the Circular merely clarified the classification. The appellants wrongly claimed duty exemption, leading to a demand for duty payment, which was rightly confirmed.

Duty Calculation and Modvat Credit:
The appellants argued that duty calculation should consider the Modvat credit on inputs used in production and the cum-duty price principle. The Tribunal agreed that the duty amount calculation by the Department was incorrect. The appellants were entitled to claim Modvat credit and the cum-duty price principle, citing precedents like Bharat Wagon & Engg. case and C.C.E., Delhi v. Maruti Udyog Ltd. case. As these aspects were not considered, the matter was remanded to the adjudicating authority for a fresh decision, with instructions to consider the Modvat claim and cum-duty price, affording the appellants a hearing opportunity.

Conclusion:
The Tribunal upheld the classification of the 'Plastic Satranj' product under Chapter 46 but remanded the case for a reevaluation of the duty amount payable by the appellants. The decision emphasized the need to consider Modvat credit and the cum-duty price principle in the duty calculation process.