Duty requantification on remand requires fresh valuation deductions, while redemption fine needs confiscation to be proposed in notice.

When duty is requantified on remand, the assessee's claim for deduction under Section 4(4)(d)(ii) must be examined afresh as part of valuation. Redemption fine cannot be sustained, and bank guarantee proceeds cannot be appropriated towards confiscation-related liability, where the show-cause notice did not propose confiscation of the goods. The penalty question was also left for fresh consideration on remand. The matter was returned to the original authority for fresh quantification of duty and reconsideration of the consequential levy and penalty issues in accordance with law.

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Issues: (i) Whether, while requantifying duty pursuant to remand, the assessee was entitled to the benefit of Section 4(4)(d)(ii) of the Central Excise Act, 1944. (ii) Whether redemption fine and appropriation from the bank guarantee could be sustained when the show-cause notice did not propose confiscation, and whether the penalty issue required fresh consideration.

Issue (i): Whether, while requantifying duty pursuant to remand, the assessee was entitled to the benefit of Section 4(4)(d)(ii) of the Central Excise Act, 1944.

Analysis: The earlier remand was specifically for requantification of duty. That exercise necessarily required consideration of the assessee's claim for the statutory deduction under Section 4(4)(d)(ii). The benefit had been specifically sought but was not granted by the lower authority.

Conclusion: The assessee was entitled to have the claim under Section 4(4)(d)(ii) considered afresh while quantifying duty, and the matter was remitted for that purpose.

Issue (ii): Whether redemption fine and appropriation from the bank guarantee could be sustained when the show-cause notice did not propose confiscation, and whether the penalty issue required fresh consideration.

Analysis: The amount recovered from the security deposit was in substance redemption fine. If the show-cause notice did not propose confiscation of the seized goods, the authority could not proceed to impose redemption fine or appropriate the bank guarantee towards that end. The penalty-related grievance was also left for reconsideration on remand.

Conclusion: Redemption fine and appropriation from the bank guarantee could not be sustained if confiscation had not been proposed in the notice, and the penalty issue was to be examined afresh.

Final Conclusion: The matter was sent back to the original authority for fresh quantification of duty and reconsideration of the consequential levy and penalty questions in accordance with law.

Ratio Decidendi: When duty is requantified on remand, statutory deductions relevant to valuation must be examined, and redemption fine cannot be imposed unless confiscation of the goods was put in issue in the show-cause notice.

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