Classification of permanent magnets: items intended for magnetisation are excluded from the permanent magnet exemption under the new tariff.
The new Central Excise Tariff separately lists permanent magnets and articles intended to become permanent magnets, and neither section nor chapter notes nor the HSN Explanatory Notes treat the two categories as equivalent; therefore articles intended to become permanent magnets after magnetisation cannot be treated on par with permanent magnets and the exemption for permanent magnets does not apply to them.

Classification of spent caustic soda lye: no additional excise duty on clearance despite classification as caustic soda.
Spent caustic soda lye arising from duty-paid caustic soda used in textile processing is classifiable as caustic soda but, since no new product emerges, no further excise duty shall be chargeable on its clearance; trade to be informed and pending assessments finalised accordingly.

Exemption for flared gases confirmed; duty not demandable for gases released to atmosphere, prior cases governed by proviso.
The Board clarified that Notification 177/87 exempts all gases allowed to escape into the atmosphere by flare system or otherwise, so duty is not demandable for such releases after that notification; for earlier periods and pending assessments, gases flared into the atmosphere are to be treated under the proviso to the relevant rule of the Central Excise Rules as per earlier Board instruction.

Officer deputation policy: deputation not required for most appeals; officers sent only for important or requested cases
The Board decided that routine deputation of officers from jurisdictional Collectorates to attend every hearing before the Collector (Appeals) is not required; the Collector may deputise a knowledgeable officer only in cases he considers important, considering factors like revenue implications and effect of the dispute. For appeals before the CEGAT, deputation from Collectorates is unnecessary except where specifically requested by the relevant appellate officer.

Modvat credit eligibility denied where inputs are destroyed before use; credit must be reversed and cases adjusted.
Modvat credit on duty paid for inputs is admissible only if the inputs are actually used in manufacture; where such inputs are destroyed by fire before use, the credit is not permissible and must be reversed, and pending cases should be disposed of accordingly.

Officer conduct during searches: record statements promptly and summon persons during working hours while ensuring courteous treatment.
Central Excise officers must, as far as possible, defer recording statements until after the search; if not possible, record statements immediately after the search, extend due courtesy to persons questioned, and ordinarily summon persons on a working day during normal working hours, with field formations instructed for strict compliance.

Annual stock taking under rule 223A: retained but to be conducted by officer teams to limit staff-licencee contact.
Annual statutory stock taking under rule 223A mandates yearly physical inventories to verify periodical returns; despite a suggestion to dispense with routine stock taking because of computerisation and cost inefficiency, the Board directed that stock taking of important factories be performed by a team of officers headed by an Assistant Collector to reduce staff-licencee contact while preserving verification.

Modvat credit on packaging materials can be used to discharge duty on packaging and subsequently on final production.
Modvat credit attributable to inputs used in manufacture of packaging material may be used to pay duty on that packaging material whether consumed captively or otherwise, and the duty so paid can thereafter be applied for payment of duty on the final production in which the packaging material is used.

Classification of vulcanising solution as compounded rubber, not prepared adhesives, where retail-sale criterion is unmet.
The vulcanising solution-rubber in organic solvents with vulcanising agents-is essentially a rubber solution and, per HSN Notes and Board guidance, does not qualify as a retail "prepared adhesive"; it should be classified as compounded rubber under the tariff heading for compounded rubber, particularly where the product is captively consumed and the retail-sale criterion for prepared adhesives is not met.

Modvat credit admissibility: no credit for sand moulds used in casting, but input duty credit allowed if moulds not fully exempt.
Modvat credit is disallowed for sand moulds when those moulds are used as inputs in the casting process. However, Modvat credit is allowable on duty paid for inputs used in the manufacture of sand moulds if the sand moulds themselves are not fully exempt from Central Excise duty; the Board's prior letter is modified to this extent.

Manufacture for excise: cutting, slitting and perforation of duty-paid jumbo film rolls not treated as manufacture.
The Ministry, after consultation with the Comptroller and Auditor General, directs that cutting, slitting, repacking and perforation of duty-paid imported jumbo rolls of sensitised photographic paper and cinematographic, graphic art, industrial and medical x-ray films do not amount to manufacture for central excise assessment, and advises enforcement of these guidelines in assessment of such goods.

Unused central excise stamps clarified to mean only stamps not affixed on match boxes, affecting credit entitlement.
The Board clarified that the term "unused" in the proviso to the rule refers exclusively to Central Excise stamps which have not been affixed on match boxes, so credit depends on whether the stamp has been physically affixed.

Direct input rule: only fuel used as direct input for export manufacture qualifies for exemption.
Only that quantity of HSD/LDO brought into a Free Trade Zone/100% EOU that is used as a direct input in the manufacture of goods meant for export is eligible for exemption; inputs not directly used are not entitled to exemption, and the Collector must decide what constitutes a direct input on the merits.

Cess on motor vehicles applies at manufacturer clearance and should not be re levied where chassis cess was already paid.
The levy targets vehicle manufacturers and not independent body builders: cess must be levied and collected on vehicles as cleared from manufacturers' premises, and no further cess should be imposed where an independent body builder fits a body on a chassis on which cess has already been paid, since applying the Tariff Act levy twice would exceed the maximum rate permitted under the IDR Act, 1951.

Appointment of Cost Auditor requires certificate of compliance with audit-number limits and prior central government approval.
Appointment of a Cost Auditor requires prior Central Government approval and a written certificate that the appointment will comply with sub-section (1B) of Section 224; for that certificate the auditor must count only companies for which he holds firm written letters of appointment. A Cost Auditor's term is deemed to have concluded once he submits the cost audit report to the Central Government with a copy to the company, and his obligation to answer review queries does not bar accepting a new appointment so long as the audit-number limit is not exceeded.

Uniform reporting of import entries: include only into-bond Bills of Entry at port of importation; exclude ex-bond clearances.
Prescribes that DTR entries must record only into-bond Bills of Entry at the port of importation and that particulars of ex-bond clearances must not be entered, to prevent duplication and distortion of import figures; all Customs Houses/Collectorates must adopt this uniform procedure and acknowledge receipt and report compliance.

Excisability of molten sulphur clarified: intermediate transient molten sulphur in sulphuric acid manufacture is not chargeable to excise.
Molten sulphur produced from duty-paid sulphur during the manufacture of sulphuric acid is an intermediate, transient, non-marketable form and therefore is not to be treated as 'manufactured' excisable goods; the Board, accepting the Dy. Chief Chemist's view and noting Union Carbide on marketability, directs that excise duty should not be charged on such molten sulphur and pending assessments be finalised on that basis.

Modvat credit and full exemption coexistence permitted where separate accounting and input-output attribution secure correct credit application.
Simultaneous availment of Modvat input-credit and full exemption is permitted provided the inputs on which credit is taken are used in manufacture of dutiable final products and accounted for through a reasonable system. Manufacturers may produce exempt and dutiable variants concurrently if separate accounts are maintained from raw material to finished product. Claimants must give prompt intimation on receipt of raw materials destined for exempt production, make such material available for inspection, maintain records, and submit quarterly returns; the approach applies to other commodities under similar circumstances.

Designation of proper officer: superintendent to inspect, seal and sign DEEC/Pass Book exports; inspector remains proper officer otherwise.
For exports under the DEEC/Pass Book schemes the Superintendent of Central Excise is designated as the proper officer to perform inspection, sealing and to sign or counter-sign AR.4/AR.4s; for other exports the Inspector of Central Excise remains the proper officer. Prior Board instructions are modified accordingly and a trade notice is advised.

Requirement of Section 11A show cause notice bars recovery unless procedural formalities are complied with.
Department cannot recover differential excise duty unless a show cause notice is issued under Section 11A and the procedural formalities for that notice are complied with; the Supreme Court so found where a demand notice preceded proper classification and subsequent Section 11A procedures. The Board instructs field officers to adhere to these formalities and holds Collectors accountable if revenue is lost due to non-compliance.