Failure to consider prior duty payment and exemption pleas can justify setting aside a demand and remand for fresh adjudication.

A demand order confirming central excise duty was set aside because the authority failed to consider material objections raised by the assessee. Those objections included prior payment of duty under the Medicinal and Toilet Preparations (Excise Duty) Act, 1955, the claimed benefit of Notification No. 50/2003-C.E. for units in Himachal Pradesh and Uttarakhand, and the contention that a further levy under the Central Excise Act, 1944 would amount to double taxation. Since these statutory and exemption-based pleas remained unexamined, the matter was remanded for fresh adjudication after hearing the assessee and deciding all relevant contentions.

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Issues: Whether the demand order confirming central excise duty was liable to be set aside and the matter remanded for fresh decision because the authority did not consider the assessee's plea of prior payment of duty under the Medicinal and Toilet Preparations (Excise Duty) Act, 1955, the claim of exemption under Notification No. 50/2003-C.E. dated 10.06.2003, and the plea that the demand would amount to double taxation.

Analysis: The disputed products were toiletry preparations containing alcohol, and the assessee asserted that duty had already been paid under the Medicinal and Toilet Preparations (Excise Duty) Act, 1955. The impugned order did not address the assessee's contention that a further levy under the Central Excise Act, 1944 would amount to taxing the same goods twice. The exemption notification applicable to units in Himachal Pradesh and Uttarakhand was also not considered. Since these material objections went unexamined, the order could not be sustained without a fresh consideration of the assessee's stand after hearing it.

Conclusion: The demand order was set aside and the matter was remanded to the authority for a fresh order after affording an opportunity of hearing and considering all relevant contentions.

Ratio Decidendi: A demand order that fails to consider material statutory and exemption-based objections, including a plea of prior duty payment and alleged double taxation, is liable to be set aside and remanded for fresh adjudication after hearing the assessee.

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