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of <h1>Tribunal Upholds Duty Liability on 'Compound P' in Pan Masala Production</h1> <h3>Commissioner of Central Excise, Pune - III Versus Dhariwal Industries Ltd</h3> Commissioner of Central Excise, Pune - III Versus Dhariwal Industries Ltd - TMI Issues:Appeal against confirmation of duty on 'compound P', valuation based on CAS-4, dispute on applicability of circular, grievance regarding acceptance of CAS-4 certification, deviation from directions in de novo proceedings.Analysis:Issue 1: Demand of duty on 'compound P'The appeal was against the confirmation of duty on 'compound P' manufactured by a company. The compounds were mixtures used in the production of pan masala and ghutka. The Revenue contended that there was a disproportionate use of raw materials, leading to a demand for duty. The assessable value was computed based on declared process loss and circulars issued by the Central Board of Excise & Customs. The case involved reworking the assessable value based on a report by the Assistant Director (Cost) and subsequent adjudication confirming a duty liability.Issue 2: Valuation based on CAS-4The Tribunal directed the re-determination of the assessable value in accordance with CAS-4. The Revenue raised concerns about the acceptance of CAS-4 certification for valuation, arguing that it was not previously claimed by the assessee. They contended that settled law prohibits new contentions before appellate authorities. The Tribunal upheld the use of CAS-4 for valuation, emphasizing the importance of following directions issued by the appellate authority in de novo proceedings.Issue 3: Dispute on applicability of circularRevenue argued that the Commissioner erred in applying a circular from 2003 to earlier years. They contended that the instructions of the Central Board of Excise & Customs regarding clearance by the appellant were not considered. The Tribunal emphasized the need for adherence to applicable circulars and directives in determining duty liability and valuation.Issue 4: Grievance regarding acceptance of CAS-4 certificationThe main grievance of Revenue was the acceptance of CAS-4 certification for determining the assessable value. The Tribunal highlighted the importance of following principles of natural justice, including granting the opportunity for cross-examination. The Tribunal emphasized that the adjudicating authority in de novo proceedings must adhere to the directions given by the appellate authority, preventing deviations that could jeopardize the fresh order.Issue 5: Deviation from directions in de novo proceedingsThe Tribunal dismissed the appeal of Revenue, noting that the grounds raised did not present substantive points against the findings of the adjudicating authority in de novo proceedings. The Tribunal emphasized the importance of following directions issued by the appellate authority and declined to review its own earlier order, maintaining judicial propriety and upholding the finality of the decision.In conclusion, the Tribunal upheld the order-in-original confirming the duty liability on 'compound P' while emphasizing the importance of following directives, principles of natural justice, and settled laws in adjudicating such matters.
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