Cum-duty valuation and composite penalty under distinct excise provisions require separate legal treatment and fresh quantification.

Where disputed clearances were invoiced as duty-inclusive sales and the assessee had already furnished a duty worksheet, the duty demand had to be re-quantified on the basis of that worksheet and could not exceed the amount so computed. The allowance of cum-duty treatment was therefore upheld. On penalty, a single composite penalty imposed under Section 11AC and the Central Excise Rules could not be sustained because the provisions operated under different legal standards and Section 11AC was not in force for part of the period. The penalty was set aside for fresh consideration on liability and quantum.

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Issues: (i) Whether the sale price of the goods was to be treated as cum-duty price and the duty demand re-quantified on the basis of the assessee's worksheet; (ii) Whether the composite penalty imposed under different penal provisions, including Section 11AC, could be sustained.

Issue (i): Whether the sale price of the goods was to be treated as cum-duty price and the duty demand re-quantified on the basis of the assessee's worksheet.

Analysis: The disputed clearances were made against invoices showing duty on the sale price, while the record indicated collection of additional amounts from buyers. The assessee had itself furnished a worksheet computing the duty payable and the adjudicating authority had accepted its entitlement to the benefit of Section 4(4)(d)(ii) of the Central Excise Act, 1944. In these circumstances, no duty could be demanded beyond the amount reflected in the assessee's own worksheet, and the demand required correction accordingly.

Conclusion: The duty demand was liable to be re-quantified on the basis of the assessee's worksheet, and the Revenue's challenge to the allowance of cum-duty treatment failed.

Issue (ii): Whether the composite penalty imposed under different penal provisions, including Section 11AC, could be sustained.

Analysis: The penalty had been imposed as a single composite amount without separating the basis under Section 11AC and the Central Excise Rules, even though Section 11AC was not in force for a major part of the disputed period and the statutory considerations under Section 11AC and Rule 173Q were different. The penalty determination therefore required fresh consideration with a proper hearing and with due regard to the distinct legal standards applicable to each provision.

Conclusion: The penalty order could not stand as made and the matter required fresh decision on liability and quantum.

Final Conclusion: The Revenue's appeal was rejected, while the assessee obtained partial relief by way of remand confined to re-quantification of duty and reconsideration of penalty.

Ratio Decidendi: Where the assessee's own computation of duty is accepted in principle, duty cannot be demanded beyond that computation without fresh basis, and a composite penalty imposed under distinct penal provisions must be separately examined in accordance with the applicable statutory standards.

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