Cum-duty valuation and exemption benefit apply despite excise irregularities in duty recomputation for clearances.

Benefit of Notification No. 1/93-C.E. was held to remain available for computing duty on the appellants' clearances for 1994-95, and non-maintenance of records or failure to observe excise formalities did not by itself justify denial of the exemption. The duty was required to be recomputed on a cum-duty basis, and even where removals were treated as clandestine, the exemption benefit had to be extended if otherwise applicable. The job work was to be treated in accordance with law as the appellants' own manufacture and clearances. The matter was remitted to the Assistant Commissioner for fresh decision after personal hearing.

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Issues: Whether the appellants were entitled to the benefit of Notification No. 1/93-C.E. while computing duty on the clearances for 1994-95, and whether the duty was required to be reworked by treating the clearances as cum-duty clearances despite non-maintenance of records and non-observance of excise formalities.

Analysis: The clearance figures were not in dispute and had been accepted by the department. Denial of the exemption benefit was not justified merely because the appellants had not maintained records or complied with central excise formalities. Even where removal is treated as clandestine, duty is to be recalculated after extending the benefit of the exemption notification, if applicable. The duty therefore had to be recomputed by granting the benefit of Notification No. 1/93-C.E. and by applying the cum-duty principle. The job work was also directed to be treated in accordance with law as the appellants' own manufacture and clearances.

Conclusion: The appellants were entitled to have the duty recomputed after extending the benefit of Notification No. 1/93-C.E. and applying cum-duty valuation; the matter was remitted to the Assistant Commissioner for fresh decision after personal hearing.

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