ORDER
P.S. Bajaj, Member (J)
1. This appeal has been directed by the appellants against the impugned order-in-appeal vide which the Commissioner (Appeals) has affirmed the order-in-original.
2. The issue in this appeal relates to the classification of the goods (HDPE) manufactured by the appellants and the differential duty payable by them.
3. The facts are not much in dispute. The appellants are engaged in the manufacture of strips and like of Synthetics Textile material (HDPE) of width not exceeding 5 mm and intended for knitting or weaving of fabrics or for manufacture of sacks. These goods were classified under Chapter sub-heading 5406.90, 5408.00 and 6301.00 prior to 24-9-1992. Thereafter the Board vide letter dated 24-9-1992 in exercise of power under Section 37B of the Act for the purpose of uniformity in the classification of excisable goods, changed the classification to Chapter sub-heading 3926.90 and 3920.32. The appellants were then called upon to pay the differential duty of Rs. 4,90,254/-. After getting their reply wherein they denied their liability to pay, the adjudicating authority confirmed the demand through the order-in-original which had been affirmed by the Commissioner (Appeals).
4. We have heard both sides and gone through the record. So far as the change in the classification of the goods manufactured by the appellants is concerned, the same, in our view, cannot be disputed by them. The Board had the power under Section 37B of the Act to issue the Circular for the purpose of uniformity in the classification of the goods and change the classification, but it cannot be disputed that change could take place only from the date from the Board Circular was issued. The Board Circular in the instant case was issued only on 5-11-1992 and as such the differential duty could be demanded from the appellants from that date till 6-12-1992 and not from back date i.e. 24-9-1992, as demanded in the show cause notice. In this view, we are fortified by the ratio of the law laid down in the case of H.M. Bags Manufacturer v. CCE, 1997 (94) E.L.T. 3 (S.C.), wherein the Apex Court has ruled that the Board Circular issued under Section 37B, would be effective from the date of its notification for publication and no demand of duty for the period prior to that date, cannot be raised. Therefore, the impugned order confirming the differential duty from 24-9-1992 against the appellants, cannot be sustained and deserves to be modified. The differential duty would be payable by the appellants from 5-11-1992 onwards till the date mentioned in the show cause notice i.e. 6-12-1992.
5. The learned counsel has, however, contended that the appellants are entitled to the Modvat credit also on the inputs used by them in the manufacture of the goods and as such the same should be allowed. In support of his contention, he has referred to the ratio of the law laid down in the case of H.M. Bags v. CCE, New Delhi, 1995 (75) E.L.T. 171.
6. The learned SDR has, however, attempted to controvert this contention of the learned counsel on the ground that procedure for claiming the Mod-vat credit has never been followed by the appellants and they have not even claimed before the authorities below. Every assessee has got a statutory right to claim the Modvat credit, if permissible to him under the relevant law/rules. He cannot be debarred from claiming the same for the simple reason that he failed to put forth the claim at the initial stage. The doctrine of estoppel by acquisance cannot be invoked against him. In our view, this aspect of the matter regarding the availability of Modvat credit to the appellants deserves to be examined by the adjudicating authority before working out the differential duty payable by them. Such a relief was allowed in the case of H.M. Bags, supra, by the Special Bench of the Tribunal in similar circumstances.
7. In view of the discussion made above, the impugned order of the Commissioner (Appeals) accordingly stands modified and the differential duty recoverable from the appellants shall be worked out taking into account the Modvat credit, if any, admissible to them under the relevant law/rules on the inputs used in the manufacture of final products.
8. The appeal of the appellants accordingly stands disposed of in the above terms.