Exemption for distilled water with vaccine required fresh review; matter remanded for decision after natural justice concerns

Excise duty on distilled or sterilized water cleared with vaccine required fresh examination because the exemption for such water used in the factory of production under Notification No. 3/2005-CE was not considered, and the matter had not been properly heard on merits. The order was set aside and the case was remanded to the first appellate authority for a fresh decision after complying with natural justice, with all issues kept open.

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Issues: Whether the dispute concerning excise duty on distilled or sterilized water cleared along with vaccine required fresh consideration in light of the exemption notification and principles of natural justice.

Analysis: The appeal concerned duty liability on distilled or sterilized water cleared as part of a combo pack with vaccine. The prior appellate order had proceeded without considering the exemption for distilled or sterilized water used in the factory of production under Notification No. 3/2005-CE dated 24.02.2005. It was also noted that the matter had been decided without effective appearance before the first appellate authority, so the issue had not been properly examined on merits.

Conclusion: The impugned order was set aside and the matter was remanded to the first appellate authority for fresh decision after following the principles of natural justice, with all issues kept open.

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