Valuation remand cannot be limited to Rule 7 alone; reassessment must stay within the show cause notice.

A remand for fresh valuation could not be confined to Rule 7 of the Central Excise (Valuation) Rules, 1975 because no reasons were recorded for excluding the other valuation provisions. The appellate direction limiting the reassessment was therefore modified. However, the setting aside of the original assessment on the ground that it travelled beyond the show cause notice was upheld as consistent with natural justice. The matter was sent back for redetermination under Section 4, strictly within the allegations in the show cause notice, with a proper hearing and liberty to adduce additional evidence.

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Issues: Whether, in a remand order for fresh valuation, the direction could validly confine the reassessment to Rule 7 of the Central Excise (Valuation) Rules, 1975, and whether the re-determination had to remain within the allegations made in the show cause notice and the requirements of natural justice.

Analysis: The appellate order had already set aside the original assessment and remanded the matter for de novo consideration, but the direction limiting the reassessment to Rule 7 alone was found to be unsustainable because no reasons were recorded for excluding the other valuation provisions. At the same time, the order setting aside the original assessment for travelling beyond the show cause notice was upheld as consistent with natural justice. The reassessment was therefore required to proceed under Section 4 and strictly within the allegations in the show cause notice, with a proper hearing and liberty to adduce additional evidence.

Conclusion: The restrictive direction confining the reassessment to Rule 7 was modified, and the matter was sent back for re-determination in accordance with Section 4 and the show cause notice, with opportunity of hearing to the appellants.

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