We finally managed to install Argus server at Oxford with messy workaround. Installation and configuration was reasonably ok, and once policy structure was clear then writing and loading policy was also easy. Details are here http://www.gridpp.ac.uk/wiki/Oxford.
The main issue was host certificate issued by UK CA which contains an "emailAddress" and supposedly this is depreciated year(s) ago and most developers assume that there is no "emailAddress" in host certificate. Although still it is a bug in Argus and hopefully would be resolved in next release.
So the workaround
By default pap-admin command uses host certificate in /etc/grid-security/ if started from root but since there is a problem with host certificate so I copied my personal certificate proxy from UI and started pap-admin using that proxy. Then added ACE
This workaround was suggested by Andrea Ceccanti
The only issue is that if you want to restart pap service then first remove ACE using remove-ace command, restart pap and then add ACE again.